Islamabad: In front of a parliamentary panel on Wednesday, Deputy governor State Bank of Pakistan (SBP), Riaz Riazuddin admitted that the decision to depreciate the rupee on the 5th of July was taken on his own.
In a briefing to the Senate Standing Committee on Finance, Riazuddin defended his action of not taking the finance ministry into confidence before taking such a momentous decision.
He added he took this decision in capacity of his position as acting governor of the central bank under the SBP Act of 1956 which permitted him to act independently without consulting the finance ministry.
He explained to the parliamentarians the rationale behind this decision. Riazuddin said the rising external sector deficit and foreign debt repayments had forced him to call for the depreciation of the PKR in the open-market.
According to Chairman Senate Standing Committee, Saleem Mandviwalla he didn’t feel there was any conspiracy behind the depreciation of the PKR and believed the decision taken by Riaz Riazuddin was right in those circumstances.
On 5th of July, Pakistan rupee (PKR) had fallen sharply both in the interbank and kerb market to reach a 2.5 year high of Rs108 from Rs104.91 the previous day. The PKR had remained relatively stable since August 2015, and according to a Topline Security report, the currency has devalued annually by 5 percent in the last decade or so.