Pakistan’s rupee dropped to a record low on Tuesday after the central bank continued to ease its grip on the currency as economic pressures mount. The rupee continued its decline for a third day, falling 1.9 percent to 109.5 a dollar at 4:57 p.m. in Karachi, according to data compiled by Bloomberg, making it the biggest decliner globally since Friday, when the State Bank of Pakistan first initiated the apparent devaluation. The move to lower the rupee’s value came as Pakistan’s current account deficit continued to widen and foreign-exchange reserves dwindle this year, leading to increasing calls from investors and economists for the central bank to abandon its managed float. The rupee was the most stable currency in Asia since 2014 before the fall. A devaluation was initially blocked by Finance Minister Ishaq Dar, who voiced opposition in July after the central bank let the rupee slide for the first time since 2015. Since then however — facing corruption charges and arrest in Pakistan — Dar was granted medical leave in London last month by Prime Minister Shahid Khaqan Abbasi, who has taken over the finance portfolio himself.
“This is extraordinary,” said Waqar Masood, a former Pakistani finance secretary. “There is more focus on dealing with economic issues now.” In an effort to shore up its finances, Pakistan raised $2.5 billion in dollar-denominated debt last month to pump up foreign-exchange reserves that have slumped 29 percent to $12.9 billion in the year through October.