Pakistani Rupee Plummets to Record Low with ECAP Removing Exchange Rate Cap

Pakistan’s rupee plunged to a record low against the US dollar on Thursday, after the Exchange Companies Association of Pakistan (ECAP) removed an unofficial cap on the exchange rate.[0] The removal of the cap was part of the government’s effort to comply with the International Monetary Fund (IMF) condition and let the currency drop slowly in the open market.

The development comes after the ECAP decision to “remove a self-imposed price cap” it used to sell and buy dollars in the open market, adding that it will now trade in accordance with the prevalent demand and supply dynamics.[0]

The Pakistani rupee depreciated by 49 paisa against the US dollar in the interbank trading on Wednesday and closed at Rs230.89 against the previous day’s closing of Rs230.40.[1] The price of the euro decreased by 17 paisa and closed at Rs251.01 against the previous day’s closing of Rs251.18, according to the State Bank of Pakistan (SBP).[2] The greenback was being traded at Rs243 in the open market at 11am, with a drop of 0.93 per cent from yesterday’s close of Rs240.75.[3]

Zafar Paracha, the General Secretary of ECAP, stated that the talks between ECAP representatives and SBP Deputy Governor Inayat Hussain were productive.[4] The State Bank fulfilled our requests by removing the restriction.[5]

The greenback has gained Rs30.41 in the interbank market since Thursday after the ECAP removed an unofficial cap on the exchange rate.[6] Topline Securities CEO Muhammad Sohail said, “The much-awaited PKR adjustment has been done today by allowing banks to quote rates based on market demand-supply. This was the case till Sep 2022 but later bank rate was kept in a narrow band that gave rise to the black market. Now the grey market rate will come closer to the interbank rate. This will help in increasing exports and inward remittances through banking channels. This may also help in reviving the delayed ninth review with International Monetary Fund (IMF) and inflows from friendly nations.”[7]

The difference between the interbank and open market rates of the rupee and the dollar has increased due to the lack of US dollars in the country and political instability.[8]

0. “Rupee plunges to record low in inter-bank market after nearly 10% fall” Business Recorder, 26 Jan. 2023,

1. “Rupee falls 0.92% against dollar in open market after exchange cap removal” The News International, 25 Jan. 2023,

2. “Rupee depreciates 25 paisa against US dollar – Business” Dunya News, 24 Jan. 2023,

3. “Pakistani rupee falls over Rs8 against US dollar in interbank market” ARY NEWS, 27 Jan. 2023,

4. “USD trades at Rs243 in open market after exchange rate cap removed”, 25 Jan. 2023,

5. “After removal of exchange rate cap US dollar traded ‘up to Rs255’ in open market” Dunya News, 25 Jan. 2023,

6. “SBP intervention limits rupee’s fall after cap lifted”, 26 Jan. 2023,

7. “End of Daronomics As PKR Crashes to All-Time Low After Biggest Ever Single Day Drop” ProPakistani, 26 Jan. 2023,

8. “Pakistani rupee touches historic low amid economic uncertainty” La Prensa Latina, 26 Jan. 2023,