KARACHI: The market-based free exchange rate has failed to stop the bullish US dollar which crushed the local currency to its lowest closing at Rs172.78 on Monday.

The State Bank of Pakistan (SBP) — which has been promoting the market-based free exchange rate — is unable to stop this free-fall which pushed up the prices of imported products and raw materials and is ultimately hitting the entire economy.

A banker said there was no influence from the SBP to stop this free fall of the Pak rupee which fell as low as Rs173.20 during the session but slightly gained to stay at Rs172.78 by the time of closing of the inter-bank market.

“When petroleum prices were increased it was taken as the output of the negotiation with the International Monetary Fund (IMF). Now the steep fall of the rupee against the dollar is also being considered as the reason for the IMF’s condition,” said a senior banker dealing with the currency market.

A high-level Pakistani financial team is in Washington to negotiate with the IMF for loans.

Since May 2021, the dollar has appreciated by 13.4 per cent against the Pak rupee.

Published in Dawn, October 19th, 2021