KARACHI: The rupee remained stable against the dollar at Rs124.1/124.3 in the inter-bank market on Friday compared with Thursday’s close of Rs124.1/124.3. 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.
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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.
(This news/article originally appeared in The Express Tribune on September 1st, 2018)