Pakistani rupee tumbles about 5% in apparent central bank devaluation

Islamabad: The Pakistani rupee plunged about 5 percent in early trading on Tuesday in an apparent devaluation by the central bank, market participants said, a day after the new government said it would seek an International Monetary Fund (IMF) bailout.

The rupee tumbled to as low as 131 per dollar in early trading on Tuesday after closing at 124.26 on Monday.

"The central bank has given an indication to let the rupee go with market forces," said one market participant at a brokerage. A second market participant agreed there was a devaluation by the central bank.

The State Bank of Pakistan could not be reached immediately for comment.

The central bank runs what is widely seen as a managed float, though its official stance is that the currency is freely traded.

The latest fall in rupee value appears to be the fifth devaluation since December and in line with the decision to seek IMF support to avoid a balance of payments crisis.