A timely intervention by the State Bank of Pakistan (SBP) in the interbank market helped the local currency to survive against dollar once again, which had reached to the highest recorded level of PKR 111 against dollar. The Banks and other interbank market members feared that SBP might fall short of cash for repaying IMF loan. However, a timely injection of $100 million in banking system by SBP eased up the situation.
Analytics have predicted that dollar would be more stable in coming week and the exchange rate will come the normal level. A big payment of $140 million dollar was made on Friday while another payment of $110 million dollar will be made on October 1, 2013.
SBP’s spokesman also declared that the State Bank would intervene again; in case if dollar and other currencies rises again in the interbank. Governor SBP is himself monitoring interbank market and more funds will be injected in case the dollar goes up again.
The two loan repayments have created a high demand of dollar in the interbank market as the banks were expecting that SBP would draw this amount from interbank market. Timely injection of dollars by SBP not only brought the exchange rate down in Open currency and inter.bank markets and stabilize rupee as well. Due to high demand of dollars the exporters and foreign based Pakistanis stopped their dollars outside Pakistan.
Both SBP Governor Mr. Yasin Anwar and Minister of Finance Mr. Ishaq Dar held meetings with heads of currency exchanges and a decision to monitor and deal with rate fluctuations in the interbank market as per the government policies was made. In the open market the dollar closed at Buying PKR 107 and selling around PKR 107.5. While exchange companies were displaying rates in the range of PKR 109 and 110.