Pakistan

Rupee weakens against dollar

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

Correspondent August 28, 2018

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

KARACHI: The rupee weakened against the dollar at Rs124/124.2 in the inter-bank market on Monday compared with last Monday’s close of Rs123.4/123.6. Following reports that China had agreed to immediately lend $2 billion to Pakistan, the rupee had appreciated against the US dollar. Prior to this, it had lost 22% of value since December 2017 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, August 28^th, 2018.

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COMMENTS (1)

cuban | 6 years ago | Reply Since the USA Federal Reserve seems confident in its policy to continue to raise interest rates you can expect a continual decline in the rupee. Remember - currency valuation is based on relative value and rising USA interest rates will guarantee a strong dollar.

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