ISLAMABAD, Oct 13: Alarmed by the creeping devaluation of the rupee, the government is likely to review the 1992 Exchange Rate Liberalization Act to ease pressure on the rupee which has lost Rs2 against the US Dollar since April 2004.

Informed sources told Dawn here on Wednesday that "unbriddled liberalization" was responsible for the situation and expected the higher authorities to take corrective steps soon.

The Sources said the rupee is losing ground to dollar by 5-10 paisa every day, which was a matter of "serious concern" for the president and the prime minister. The issue warranted urgent consideration to review Foreign Exchange Liberalization Act.

It was said that on average $10 million were going out of Pakistan daily from Karachi airport alone which needed to be stopped. The recent illegal transfer of dollars by H.H Exchange company is a case in point.

Exchange rate liberalization reform programme introduced in 1992 by former prime minister Nawaz Sharif may not work under the prevailing circumstances. Market analysts say that at that time Pakistan was pursuing a managed float exchange rate regime under which exchange rate was determined by the State Bank.

Today the floating exchange rate is determined by the inter-bank market. "The same foreign exchange policy does not seem to be feasible under the new regime, there fore, it might come under review soon," one of the analysts said.

Sources said that top economic managers involved in determining exchange rate have been away from Pakistan for more than two weeks. That has caused more problems as there was no one at the finance ministry or the State Bank to take any serious notice of the sneaking devaluation of the rupee.

Prime Minister's Advisor on Finance Dr Salman Shah returned to Islamabad from Washington last Sunday after staying there for more than two weeks. Similarly, the governor, State Bank, Dr Ishrat Hussain reached home yesterday from the United States.

Secretary, Finance, Naveed Ahsan, too, returned from Washington after two weeks on Tuesday, while secretary, Economic Affairs Division (EAD), Dr Waqar Masood Khan returned home last week from the United States.

The Sources said that the prime minister was busy in handling political issues ranging from the kidnapping of Chinese engineers to opposition's plan to start agitation on the issue of president's military uniform. "The prime minister has many other issues to look after and those who stayed away from Pakistan for so long should take up the issue," one source said.