SBP acts with ‘sizeable amount of dollars’ to defend rupee

KARACHI: The rupee rebounded sharply on Friday, posting its biggest daily per centage gain against the dollar in years after the central bank sold foreign currency in “quite a sizeable amount” to pull the exchange rate back from an all-time low, traders said.

Domestic currency closed at 160.05/dollar, 2.43 per cent stronger than Thursday’s close of 164.05 in the interbank market. In the open market, it gained Rs3.50 to close at 161 against the dollar from 164.50 in the previous session.

Traders said rupee strengthened on the back of an apparent intervention from the State Bank of Pakistan (SBP), following Prime Minister’s Imran Khan meeting with SBP Governor Dr Reza Baqir held on Wednesday. “The SBP intervened in the foreign exchange market with a sizable amount through banks and authorised exchange dealers and carried out the necessary measures to control the exchange rate,” a senior banker said. He, however, declined to disclose the amount SBP had pumped into the interbank market.

The central bank’s spokesman also declined to comment on SBP’s possible intervention to defend the battered rupee. The rupee has lost more than 50 per cent of its value since December 2017, stoking inflation and putting pressure on the central bank to curtail devaluation. The country has ballooning current and fiscal account deficits and has seen repeated devaluations of the rupee.