KARACHI, Oct 13: The rupee lost another four paisa to a US dollar in the inter bank market on Wednesday. Senior bankers said it fell to 59.57 a dollar despite a modest intervention by the State Bank from 59.53 on Tuesday.

The local currency has lost 32 paisa or more than half a per cent of value against the US dollar so far during this month. Since the start of the new fiscal year on July 1, it has lost about 2.5 per cent value on increased demand for dollars due to widening trade deficit on the back of soaring international oil prices and higher imports of machinery and capital goods.

The bankers said the SBP sold a couple of millions of dollars in the inter-bank market through inter-bank brokers but that small intervention failed to lift the sagging local currency.

On Tuesday also the SBP had sold five million dollars through a large local bank, but despite that the rupee had lost 11 paisa to a US dollar on corporate and government debt payments.

The bankers said the central bank on Wednesday also warned the banks to avoid excessive dollar buying so that the rupee could be saved from falling further. As the prices of US light crude and UK crude have risen to $54 and $51 a barrel marks showing an increase of more than 50-60 per cent since June this year, oil importing countries, including Pakistan, are witnessing increases in trade deficits and the consequent pressure on their currencies.

Pakistan's trade deficit swelled to $839 million in the first quarter of this fiscal year, from $144 million in a year-ago period. The trade deficit has widened not only because of higher oil import bills, up 38 per cent year-on-year, but also due to larger imports of machinery and other capital goods.

The SBP could have saved the rupee from falling sharply so far during this fiscal year through stronger and larger interventions but it let the rupee fall deliberately to help exporters who say their competitiveness in the world market is threatened by rising interest rates, especially the rate of export finance.

The refinance rate rose from two per cent in June to three per cent in October in response to rising T-bills yields.