KARACHI, July 8: A meeting has been called on Wednesday at the State Bank of Pakistan to discuss ways to arrest the free fall of rupee against the dollar, which once again forced the former to shed 2.6 per cent to Rs73.90 on Tuesday.

Finance Minister Naveed Qamar and SBP Governor Dr Shamshad Akhtar will jointly discuss the situation arising from the sinking of local currency. Presidents of major banks have also been invited to the meeting.

Banking sources believe that the meeting might take some important steps to tackle the situation.“There is no possibility of a sudden stop in this trend, which forces the rupee to shed weight against the greenback every day. However, the market can be influenced to restrain the fast erosion of value of the local currency,” said a senior banker.

The market is extremely shaky about the real price of the dollar in future; however, the dollar rates in forward booking were quoted as Rs75 for 3 months, Rs76.9 for 6 months and Rs80.6 for one year.

Bankers said the forward booking allows speculation about the rupee-dollar parity, which finally results in favour of speculators or money makers.

Earlier, on May 9, when the dollar touched Rs69.45, a loss of 3.5 per cent, the SBP forced the exchange companies to stop taking UK pound sterling, euro and UAE dirham out from the country and compelled the large banks to sell dollars in the market.

The action helped the local currency to recover against the dollar and it gained what it lost that day, though, the gain proved short-lived because of the greenback’s high demand.

Currency dealers said the Tuesday witnessed the same fast erosion of value of rupee as it was noted on Monday. They felt that the rupee would soon touch the 76 mark, which is the price of one litre petrol. They believe that rupee is left free to devalue itself to touch the figure of Rs76.

Since the beginning of July, rupee devalued fast against the dollar to shed a total 7.2 per cent. This erosion in value sent waves of concern across the country as not only the import will become costlier but the entire economy will be plagued with the unexpected high inflation.

The government set the inflation rate at 12 per cent for the current fiscal year but analysts believe that the oil price hike and devaluation of rupee would push it much higher than the target.

“Dollar is directly linked with our economy, it will not only make the import costlier but the inflows of dollar will cause inflation,” said an analyst.

“Another major factor which will seriously dent the economy is the widening of trade deficit and devaluation will make it more dangerous for the economy,” the analyst said adding that nation would have to borrow heavily from the donors to meet the deficit.

The country already pays about $4.5 billion annually as interest and instalments of liabilities, which has reached $42 billion.