KARACHI: The inquiry report about the rupee’s sudden depreciation against the dollar on July 5 has been submitted to the Ministry of Finance.

However, banking sources said the report did not hold anyone responsible for the depreciation of 3.1 per cent in a single day.

“The probe committee submitted the report about the rupee’s depreciation last Wednesday,” said State Bank of Pakistan (SBP) chief spokesman Abid Qamar.

The sudden drop in the rupee’s value had taken the federal government by surprise. Finance Minster Ishaq Dar announced that the government would immediately bring in a permanent governor at the central bank. At the time of the depreciation, SBP Deputy Governor Dr Riaz Riazuddin was serving as acting governor.

Subsequently, newly appointed SBP Governor Tariq Bajwa constituted a committee at the request of the finance minister to look into the matter. The then acting governor of the SBP also faced the investigation because the central bank had owned up to the sudden movement in the exchange rate through a press release and justified the move as an ‘adjustment’.

Sources said a number of banks were investigated, but no foul play could be established. Immediately after the depreciation, Mr Dar had held an emergency meeting with the heads of over two dozen banks in Islamabad. He asked them to bring down the exchange rate to the pre-depreciation level.

The dollar rate was Rs108.25 after the depreciation. But within a couple of days, the rate came down to Rs105.30-40 in the interbank market.

The open market had not reacted to the depreciation as the dollar was traded at a rate lower than that in the interbank market. “It was impossible to hold one person or bank responsible for the depreciation because it depends on the perception,” said a senior banker. He ruled out any political motive for the decision to depreciate the rupee.

After 70 days, the dollar is being traded at the same price that prevailed before the depreciation, with a slight change in the interbank rate.

The current price in the banking market is Rs105-40 while that in the open market is less than Rs106. The price difference between the two markets has narrowed down. The open market offers less than 50 paisa per dollar above the banking market rate.

Bankers said the probe committee’s report has lost its importance since the situation has changed after two and a half months of the depreciation.

Published in Dawn, September 17th, 2017