Pakistani rupee slumps to all-time low of 255 against dollar in inter-bank market

KARACHI – Pakistani rupee plunged drastically to approach an all-time low, days after currency exchangers lifted a cap on the rupee-dollar rate.

Earlier during the day, the currency was trading at 231 while the greenback increased by Rs 24 and was being quoted at 254.75 during intra-day trading.

The massive depreciation of over 9 percent during the trading session of the local currency is the largest single-day decline in decades.

It was also reported the country's central bank is adjusting the exchange rate to the market rate to address the widening difference between the official and open market rate.

The recent development comes as the coalition government agreed to the stringent conditions set by the US-based global lender to let the exchange rate be set by the market.

Amid the worrisome situation, money market pundits claimed the rupee was bound to plunge in the coming days as the cash-strapped nation moved to meet harsh conditions demanded by the International Monetary Fund (IMF) for the ninth review of the crucial programme.

Earlier this week, money exchange companies have come up with a counter strategy and decided to remove the cap on the US dollar amid growing artificial demand for the greenback in the market.

The local currency depreciation was also linked with depleting foreign exchange reserves held by the country’s central bank.

More to follow...