Central bank intervenes by supplying dollars to meet demand. PHOTO: REUTERS
KARACHI: Pakistan's central bank has apparently come up to rescue the rupee, as it partially recovered against the US dollar in intra-day trade in the inter-bank market on Friday.
The market talks suggested the central has intervened, meaning it supplied the dollars in the inter-bank market to fulfil demand.
The rupee had lost to a new record low at Rs168.50 to the US dollar in the first session on Friday compared to Thursday's close at Rs166.13.
Later on, the local currency managed to recover and hovered around Rs165-166, according to market sources.
The State Bank of Pakistan (SBP) keeps its intervention operations secret, as it never discloses it publically.
SBP Governor Reza Baqir has said several times in the recent past they intervene in the market when they find it essential.
Otherwise, market players (commercial banks) determine the rupee-dollar exchange rate depending upon the supply and demand situation of the foreign currency in the system, he said.
Earlier, the rupee depreciated or Rs7.46 (4.70%) in the past three days to Rs166.13 to the US dollar on Thursday.
It lost a total of Rs11.46 (or 7.43%) during the ongoing month of March till Friday.
The drop in the rupee was seen after a gap of eight months as foreigners heavily pulled out short-term investment in panic from domestic debt and stock markets in the past three weeks.
Foreigners were seen withdrawing such investment from across the world to keep cash in hands during global lockdowns amid coronavirus pandemic.
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