Rupee strengthens against dollar

SBP has maintained that the slide in the rupee’s value is due to supply and demand dynamics of foreign exchange

KARACHI: The rupee strengthened against the dollar to Rs128/128.2 in the inter-bank market on Wednesday compared with Tuesday’s close of Rs128.5/128.7. Contrary to the impression created after the previous round of depreciation, the Pakistani currency weakened further by 5.3% in its fourth round on Monday. Since December, the rupee has cumulatively shed over 21% 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, July 19^th, 2018.

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