Wednesday was a day of contradictions. Whereas the nation experienced brief euphoria over Pakistan’s win in the cricket match against New Zealand, we also experienced dismay in the form of further devaluation of the rupee. The rupee experienced an alarming bout of devaluation, with a 3.8 per cent drop in the value of the rupee against the dollar. The dollar hit a historic high of 163 against the rupee, and the British pound soared to 204, alarming the entire country.

The economic anxiety that prevailed after the sudden devaluation was heightened particularly because it was unexpected. Since May 2018, when the dollar traded at 121, the rupee has devaluated by 35 per cent. While that had brought an onslaught of criticism directed at the government, it cannot be said that the devaluation was unexpected, since the Pakistan Tehreek-i-Insaf (PTI) had clarified that economic conditions in the country would get worse before they would get better. It was also understood that to secure a bailout package from the International Monetary Fund (IMF), the fixed exchange rate would be adjusted to be more amarket-friendly.

However, Wednesday’s devaluation was a surprise because the government had promised that the exchange rate would not be allowed to float further after the initial historic devaluation from Rs121 to Rs151. To discourage citizens from buying and investing in dollars, government ministers had reassured that the exchange rate would not deteriorate further and the currency value would be stable.

Who then was responsible for going against the government’s reassurances and further floating the rupee? Was it the government who fed its people false promises and destabilised the rupee, or has the State Bank of Pakistan opted for a policy independent from the government? The events of the past, where the Prime Minister of Pakistan has alleged that he learnt of the new exchange rate from television and not from the SBP, indicate it might be the latter. If this is true, that the government has no influence on the new financial team, then the contentions of the opposition during the reshuffle might have been true.

This is very concerning- in these economic conditions, it is imperative that the government and the SBP are communicative with each other and work together. Unpredictability and lack of trust in the government and its monetary policy will be debilitating in these already tough times.