Pakistani rupee always remained vulnerable to depreciation. However, speculations created a new stir in the currency market, pushing panic buying to bring dollar value as high as Rs 119 in the open market. The officials at the State Bank, who were virtually or habitually sleeping over the slide, are now rushing to meet currency dealers to fill the widening gap between open and the inter-bank rates. As increasing demand for the greenback gripped the open market, the rupee slide could not be arrested despite sustaining its value at the inter-bank trade. Currency traders fear the speculations could cause another round of devaluation in the coming days, as buying spree is visible in the open market, pushing the rupee to its lowest level ebb. A federal minister has already accepted the hand of the government in depreciation of rupee though he fell short of revealing the pressure from the international donor agencies in the game. According to him, the government had done the devaluation of the rupee to the level it desired and that the ‘the currency has found its equilibrium’. However, speculations continue to haunt the rupee in the open market, making it a worthless entity against international currencies. People having rupee accounts in the banks and saving schemes lost two digit worth without any fault on their part.
The State Bank has directed the currency dealers to narrow down the gap between dollar price in the interbank and open currency market to 1 percent from the current 2.3 percent. But this is not the first time the rupee experienced the height of vulnerability. When the government itself opts for meltdown of rupee, the world financial institutions cannot help. One fails to understand what prompted the central bank to devalue rupee by over 9 percent when the move is likely to fail both in curtailing trade deficit and improving foreign exchange reserves. The government is now trying to fix rate at Rs 115 a dollar, but depreciation would not stop until it reaches Rs 120 a dollar not only in the open market but also in the inter-bank trade. The next government will have to go to the world financial institutions to get further loans and they want rupee value at its lowest level. No financial or economic experts can do anything until the nation stands on its own feet and is able to make rational policies. A hide and seek between dollar and rupee will continue in future.
