KARACHI, Aug 13: The exchange market on Wednesday witnessed a free fall of rupee against the dollar. It slashed the value of local currency by Rs1.70, the largest cut in a single day during the fresh spell of devaluation.

“The dollar was traded at Rs75.15 during the day while it was closed at Rs76.02,” said Atif Ahmed, a currency dealer in the inter-bank market.

Analysts said the difficult position on external account front is pushing the country towards the IMF package once again and the nation should prepare itself to brave the fallouts of conditionality of the donor.

“The erosion of foreign exchange reserves and the massive devaluation of rupee leave no option but to seek IMF help and take series of harsh economic decisions as were taken during the first four years of Shaukat Aziz,” said S.J. Ahmed, an analyst.

“I believe within a couple of months the country will have to take support of IMF as our reserves are sharply declining and are currently equal to just three months imports,” he said.

The currency watchers found no evidence of State Bank’s intervention, which has been a practice in the past to save the rupee from dollar’s bullish trend.

“This is a S.O.S. like situation and the State Bank must send this message to the government ignoring the deteriorating situation for the economy,” said Abbas Jalil, another currency dealer.

Experts said the economy seemed to be a non-issue for the government and its focus is politics, which may ultimately result in another political turmoil in the form of inflation, unemployment and hunger.

Currency dealers said there was no end-line for the fall of rupee as no support was visible for the local currency. They said each day a maximum line is set for the devaluation but the rupee goes beyond that line.

“There is no red-line for depreciation of rupee and it will continue to fall till the government comes out to help the local currency,” said Atif, the currency dealer.Dealers said the demand was so high that dollar was sold like hotcake and each time the sellers felt that they could get more.

A bank sold $25 million at different rates and finally held back $5 million when the greenback crossed even Rs75.

It was observed that along with the business community the general public was also involved in dollar buying as the massive devaluation with over 24 per cent inflation (CPI) has drastically cut the saving value of rupee.

Market experts said unless the economy was not revived with the hope of better growth, inflows of foreign exchange through portfolio investment would remain a dream. The outflow of portfolio investment has caused serious damage to exchange rate and reserves.

“Foreign investment is limited to oil and gas exploration, telecommunication and banks. This was the portfolio investment, which attracted dollars but now it is running out,” said a brokerage house analyst.

The open currency market also witnessed massive erosion in rupee value against the dollar. The dollar was traded at Rs75.80 to Rs76.10.