In a written reply to a question asked by Molvi Agha Muhammad, the minister said that the reason for depreciation of exchange rate was widening of the current account deficit during the period, because of large trade deficit due to higher demand for imports and rising international commodity prices, particularly that of oil. In addition, he said foreign capital and financial inflows also started to decline due to both global financial crisis and deteriorating law and order situation in the country. The minister said that the State Bank of Pakistan had taken various steps to stabilize Pak Rupee, including raising policy rate of 500bpc cumulatively in 2008, gradual withdrawal of market support for oil payments since FY 2009 and imposition of 100% Letter Credit margin on import of non-essential and luxury items to discourage imports. These measures helped in narrowing down the trade deficit and stabilize the exchange rate, he added.