Pakistani Rupee is in for a bumpy ride in the coming few weeks as State Bank announced that it will now yield the adjustment of Rate to the market factors; intervening only when it deems necessary.
Ever since Mr. Dar assumed the office of Finance Minister, he has been keeping the Rupee stable against Dollar despite numerous warnings from international financial institutions and some local traders and businessman.
However, it was only on 8th December that SBP stopped intervening in Foreign Exchange Market and the let the market decide rates for itself. Rupee opened Friday last week at its moving weekly average, however, within the next few hours of Friday’s early session it went on to hit 108.50/109.50, according to data on Mettis Global.
“The exchange rate movement will now be based on demand and supply of foreign exchange in the interbank market”, said the official State Bank Press Release on Friday. The State Bank officiated the Rupee devaluation by not interfering.
The notables among the industry have mixed response to this devaluation. Some fear the things may get out of hand if the markets adjust the rate to Real Effective Exchange Rate which is currently at 123.49.
The Dollar opened Monday (today) at 106.75/108 as the SBP closed the rate last week at 107 for traders to resume trading on Monday at that level. However, keeping in view the speculation and devaluation last week Rupee opened higher increasing to 109.75/110.25 at 10:50 a.m. in the morning and has went to pause at 108.18/43at 11:30 a.m.
