KARACHI, Jan 28: The State Bank of Pakistan (SBP) has decided to set up a desk to buy dollars from banks through rupee-dollar swaps, bankers close to SBP told Dawn. They said the desk might be created next month.

The SBP has so far made an outright buying of about $1 billion from banks after the September 11 attack on the US. Occasionally it has also made forward dollar buying through swaps. But now the central bank is going to create a desk to swap rupee-dollar with banks for fixed tenures.

Bankers say this step is being taken to enable SBP to inject rupee funds into the inter-bank market to rescue banks whenever they are hit by a liquidity crisis. They say such an injection made through rupee-dollar swap would also increase SBP’s foreign exchange reserves. Currently Pakistan’s foreign exchange reserves are at $4.8bn in which $3bn is held by SBP and $1.8bn by banks.

Bankers say the swap desk is being set up on the insistence of the IMF. In the past the SBP had entered into rupee-dollar swaps with money changers also but those swaps proved too costly for the SBP.