Currency: Rupee weakens against dollar

KARACHI: The rupee weakened against the dollar at Rs110.3/110.5 in the inter-bank market on Thursday compared with Wednesday’s close of Rs110.2/110.4. In the last few weeks, 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 29^th, 2017.

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