SBP fails to meet probe deadline into cause of rupee depreciation

Karachi : The stipulated date for completing its inquiry into the reasons for the fall of the PKR on July 5th has expired, as the State Bank of Pakistan (SBP) did not meet the deadline.

While talking to a local news broadcaster on Friday, SBP spokesman said that once the enquiry gets concluded, the report will be sent to the finance ministry.

After the rupee plunged by more than 3pc on July 5th, the Finance Minister Ishaq Dar had called an emergency meeting of two dozen domestic banks and financial institutions, deputy governor banking and head of treasury, SBP. Dar back then had told the media that the largest single drop in the rupee’s value in nine years was the result of a communication gap between individuals and institutions.

However, after calling for a probe into the plunging of the rupee, the finance division directed the SBP that the inquiry should not include two most important members of the Monetary and Fiscal Policies Coordination Board, including the finance minister and finance secretary, as they were not taken on-board on the matter.

As per State Bank of Pakistan Act 1956, the Monetary and Fiscal Policies Coordination Board – comprising of the Federal Minister for Finance Ishaq Dar (Chairman) and other members, including governor SBP and finance secretary – are responsible for coordinating the exchange rate policy as well as the fiscal and monetary policies, to ensure consistency among macroeconomic targets.


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