Rupee weakens against dollar

SBP maintained that slide in rupee’s value is due to supply, demand dynamics of foreign exchange in inter-bank market

Our Correspondent December 21, 2017
A currency dealer counts Pakistani rupees and US dollars at his shop in Karachi PHOTO: REUTERS

KARACHI: The rupee weakened against the dollar at Rs110.2/110.4 in the inter-bank market on Wednesday compared with Tuesday’s close of Rs109.7/109.9. In the last few days, the rupee has cumulatively shed over 4% of its value after the central bank reportedly abstained from intervening in response to the pressure being built due to a widening current account deficit.

The State Bank of Pakistan has maintained that the slide in the rupee’s value is due to supply and demand dynamics of foreign exchange in the inter-bank market. While it has promised prompt intervention in case of speculative or momentary pressures, the central bank will sit on the fence and let “market-driven adjustment in the exchange rate to continue to contain the imbalance in the external account and sustain a higher growth trajectory”, according to a recent press statement. Market rumours suggest the move is part of IMF’s conditions for another bailout package.

Published in The Express Tribune, December 21st, 2017.

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