The rupee weakened by about 4.4 percent in a single day on 20th March, 2018 to close at Rs 115.4 against the US dollar from Rs 110.5 a day earlier. This follows the fall of 4.7 percent to Rs 110.5 to a dollar in December, 2017. In a nutshell, dollar has become dearer. Although State Bank of Pakistan has argued that the rupee plunge was "market driven" as it was triggered by "some payment pressures which are building within the market," it is increasingly clear that the government has decided to move away from the currency policy that the then finance minister, Ishaq Dar, had pursued.
A Business Recorder editorial has argued the "the latest depreciation of the rupee was quite in line with the macro-indicators of the economy and was almost overdue. Pakistan's nearly dollar 300 billion economy was showing signs of vulnerability despite surging growth rates. The current account deficit of the country had jumped by 50 percent in the first eight months of FY18, making it more difficult for Pakistan to meet the widening gap in the external sector."
The government, however, is required to take all possible measures aimed at maintaining country's foreign exchange at all costs.
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