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Pakistani rupee makes sudden dive

Pakistan’s currency has suddenly and unexpectedly dropped in the biggest shift in nearly two years, in what analysts think is a deliberate move from the central bank to help deal with the country’s lack of foreign reserves.

The Pakistani rupee dropped sharply from 105 to the dollar to 108 on Wednesday, hitting a level not seen since 2013, and the first significant move since 2015.

Economists say the Pakistani central bank had helped keep the currency artificially high before now, depleting its stocks of foreign currency.

But many had not expected the bank to allow the currency to drop until after next year’s general election, when such a move would be less politically sensitive.

(Chart: Bloomberg)