KARACHI, July 26: The State Bank on Monday sold dollars in the market to boost the rupee after it fell past a 19-month low earlier, a banking source told Dow Jones Newswires.
The dollar was trading at Rs58.31 at 4.16 p.m., down from the official closing level of Rs58.44. The dollar had traded as high as Rs58.51.
"They must've sold around $10 million, which is why the market has stabilized," said a treasury dealer at a foreign bank. Zafar Shaikh, head of treasury at the State Bank declined to say if the central bank had intervened, but added that the authorities won't allow the market to be disrupted by speculative activity.
The dollar has been in a bullish trend due to rising demand for the currency from importers and a soaring trade deficit. The central bank said last week in its monetary policy paper the rupee is likely to remain under pressure for the next six months because of the trade deficit, which widened four times to $3.2 billion in the fiscal year ended June 30. The deficit spiralled primarily due to a 26.7pc jump in imports to $15.5 billion. -Dow Jones Newswires
