Rupee devaluation: SBP breaks silence over the currency crash

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Rupee devaluation: SBP breaks silence over the currency crash

ISLAMABAD - State Bank of Pakistan (SBP) breaks silence over the issue of decline in the Pakistani currency against US dollar.

SBP officially admitted that the exchange rate in the interbank market closed at PKR 133.64 to USD against previous day’s closing of PKR 124.27 to USD on October 9, Tuesday.

The Rupee showed a drop of value by Rs 9.37 against USDollar in a single day and the move seemed to be online with the policy to devalue money online with the government policy of reaching IMF bailout package.

On the other hand, the value of the Rupee dropped to 137 in the open market.

According to the official statement, SBP commented that the exchange rate movement broadly reflects the current account dynamics and also the demand-supply gap in the foreign exchange market.

Although the current account deficit narrowed in August 2018, a consistent increase in oil import bill on account of rising international oil prices has exerted pressure in the foreign exchange market.

SBP is of the view that this adjustment in the exchange rate along with the lagged impact of recent hikes in the policy rate, and other policy measures to contain imports would correct the imbalances in the external account. SBP will continue to closely monitor the situation and stand ready to intervene in case of any unwarranted volatility in the foreign exchange market.