KARACHI: The rupee weakened against the dollar at Rs119.85/120.05 in the inter-bank market on Tuesday compared with Monday’s close of Rs118.5/119.5. Contrary to the impression created after the previous round of depreciation, the Pakistani currency weakened further by 3.65% in its third round of rupee depreciation on Monday. Since December, the rupee has cumulatively shed close to 13% of its value after the central bank reportedly abstained from intervening in response to the pressure 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 press statement.
Published in The Express Tribune, June 13th, 2018.