KARACHI, Aug 15: The rupee suffered another record devaluation against the US dollar on Friday.

Currency dealers said they traded dollar at Rs77.10, a decline of Rs2, which was the single largest devaluation in a day. On Aug 13, the rupee lost Rs1.70 against the greenback.

The Friday’s fall took the total loss to the value of rupee against dollar to about 23 per cent since the beginning of this year.

Within a weak, the US dollar cut the local currency by Rs4 sending shockwaves to importers and manufacturers. At the close of the market, the rupee gained 40 to 50 paisa.

“There is no light beyond the tunnel. We don’t see movement on the government side while the State Bank looks helpless just watching the fast erosion of its own foreign exchange reserves,” said Atif Ahmed, a currency dealer.

The dealers were unable to understand the phenomenon of daily devaluation of rupee. A few of them said speculative forces have grabbed the market as they have started earning huge profits on a daily basis.

Analysts said that fast devaluation of rupee against all major currencies brought another wave of inflation and that was imported inflation.

As manufacturing sector and traders would face double inflationary pressure on economy, it would ultimately be translated into spiralling prices of goods and services in the country.

It was also feared that the devaluation of rupee would be counter-productive for the export-oriented industry.

The export-oriented industry depends one-third on imported constituents for the exportable production of goods.

The Consumer Price Index showed an inflation 24.3 per cent for July, a figure already disastrous for the manufacturing industry.

“Manufacturers cannot digest this double inflation as CPI is 24.3 per cent while devaluation of rupee against the US dollar since this year is 23.1 per cent,” said an analyst.

Traders said prices of all imported items have started increasing sharply while the profit margin has also been increased due to curtailed purchasing power of the local currency.

The immediate impact to be felt by the people on mass level would be the hike in prices of medicines and imported milk, while the manufacturing sector, like auto sector and textile, would also face serious consequences.

Currency dealers said that buyers of the greenback were nervous on Friday as they feared that any bounce-back could hit them hard. However, demand for dollar continued to consume all available US currency in the market.

When asked ‘Do they have any remedy for this free fall of rupee,’ they were found blank.

“Neither SBP reserves are enough to sell in the market for strengthening rupee, nor any big inflow of foreign exchange is in sight,” said another currency dealer, adding hopes are dying for any good news.

Earlier, an analyst had stated that the government was taking the country towards a collapse-like situation which may force it to seek IMF help and impose harsh economic decisions. The nation would have to take the bitter pill of the IMF aid as a prescription for the economic malaise.