SBP intervention lifts rupee against dollar

The State Bank of Pakistan on Monday intervened to support the depleting rupee against the US dollar in the interbank market. Sources in banking industry told Business Recorder that the State Bank disbursed about $100 to $150 million in the interbank market to arrest the depreciation of the rupee against the greenback.
Earlier, the rupee hit an all-time low against the greenback on Saturday following rumours that the government was going to set the dollar rate at Rs 91 in the budget. The PKR shed over Rs 2 to Rs 87.50 to a dollar in three days of last week because of rumours. These rumours triggered panic in the money market and massive buying of the greenback was seen in the open as well as in interbank market.
After the SBP''s intervention, the rupee staged significant recovery against the dollar on Monday despite huge demand for oil import. The US dollar witnessed decline in both interbank and open currency market and the rupee was seen trading as low as 86.70 to a dollar in the open market.
The interbank market was on the higher side due to demand for oil payments. An oil company bought about $100 million for oil import, it is learnt. In the morning session, the dollar ranged between Rs 86.40 and Rs 86.50 in interbank market, however it closed at Rs 85.90 and Rs 86 in interbank market. The rupee also registered some gains in the open market and surged to Rs 86.70 to a dollar as compared to Rs 87.50 to a dollar on Saturday.
Meanwhile, the exchange companies have urged general public not to buy dollar, as the increase in its rate is only temporary. "The dollar will further shed its weight in the open and interbank markets in next few days when the demand will reduce," they said. We want to make it clear that there was no shortage and the greenback was available in big quantity," they added.
They said general public should not invest in the dollar, as it is just a rumour that the government was going to fix its rate at Rs 91 in the budget. The government has no intention to depreciate the rupee. "We also approached Dr Waqar Masood, Secretary Ministry of Finance after the rumours of the rupee devaluation and he has dismissed these reports in the strongest terms," a representative of exchange companies said. He said it is expected that the dollar will fall to Rs 86 in next two days. The greenback is available in the market in sufficient quantity, he added.