There were two disturbing reports in the media for the past few days that the Pakistani Rupee had shed its value against the US Dollar significantly and witnessed bearish trend as KSE-100 index plunged by 804 points (2.43 percent) to close at 33,166 points. A total of 63,321,430 shares were traded, whereas the value of shares traded during the day stood at Rs 2.757 billion.

The dollar shot up in both markets, touching Rs150 in interbank and open market trade briefly before settling at Rs148.

Quick to address the situation, Prime Minister Imran Khan has set up a committee under Dr Hafeez Shaikh, his adviser on finance, revenue and economic affairs, tasked with taking steps to control devaluation of the local currency and flight of capital from the country.

But how’s Hafeez Shaikh, and the rest of the committee, going to do it? Sure, reducing amount of cash allowed abroad from $10,000 to $3,000 will save the economy something-billion a year, but it will also hinder legitimate transfers – anybody sending money for the kids’ summer fee? Make most punters just hide their dollars under the carpet for the time being.

The last devaluation had not been fully factored into the price level yet, and already we have seen another massive drop, with all indications pointing towards continued volatility.

Both the reports are un-nerving and shocking for the economic managers who are busying in playing politics and lashing out opposition parties.

Still, that doesn’t tell how they’ll ‘control the currency’s value; meaning keeping the rupee from depreciating further. Stand in the way of wire transfers between institutional dollar accounts and brokerages running digital trades in New York and Chicago? Forex for dummies comes at $2.29 on eBay. Just saying.

Point is, anybody capable of reading technical currency charts will tell you that the rupee runs at a historic five percent annual depreciation against the dollar. And whenever you keep it artificially propped up, as Musharraf’s blue-eyed Shaukat Aziz did, keeping it around 62-64 till 2008, it snaps back towards its fair, or real, value. That’s why PPP took the flak as the rupee jerked down all the way to 84-86.

This is a clear indication that the State Bank not only knew about the devaluation, but in fact let it happen by design. This is exactly how it has worked in all previous devaluations as well.

What is new this time is that the government has just signed a staff level agreement with the IMF that speaks of “prior conditions” and the need to move towards a “market determined exchange rate”, and that there is a new State Bank governor who is more likely to take these commitments seriously.

These observations beg a couple of important questions.

The present political crisis is not good for the economy and it should be resolved at the earliest to defend the legitimate interests of the broad masses and not the vested interests. Pakistan is being surrounded by deeper security problems from all directions needing proper attention. There is an unpredictable storm over the Gulf region Balochistan where the Iranian and United State can clash at any moment endangering the entire Baloch region, mainly its Mekran Coast.

It is the sweet will of the United State Monarch when to start the war or it to coordinate with other powers in attacking Iran. At the same time the borders were India and Afghanistan are also tense and far from normal. The US had publicly supported India and Afghanistan and had praised the Indian efforts in Afghanistan which is a direct threat to the security of Pakistan. Before the outbreak of hostilities in the region, the Government should keep the national economy in perfect order so that it should face all the challenges in future.