KARACHI, Nov 5: A number of measures taken by the State Bank have helped the rupee recover 1.8 per cent value against the US dollar within five days of this month. Earlier between July-October 2004
, the local currency had lost 5.5 per cent value to a dollar as the demand for foreign exchange had outstripped the supply.
Senior bankers said the rupee gained 16 paisa on Friday to close at 60.25 a dollar in the inter-bank market, up from 60.41 on Thursday. This brings the total gain the rupee has made against the dollar within five days to 111 paisa or 1.8 per cent.
The rupee made this huge recovery despite a $100 million payment by Pak-Arab Refinery Co. to a consortium of banks as the central bank not only sold $100 million to Parco but also provided foreign exchange for oil import payments.
The central bank started selling dollars to the banks for clearing oil import bills of their clients from Monday. The move was aimed at supporting the fast depreciating rupee chiefly due to rising oil prices that coupled with increased imports of oil and machinery etc., had enlarged the trade deficit.
The central bank is not only providing dollars for oil imports out of its foreign exchange reserves to support the rupee it has also tightened several rules relating to foreign exchange dealings in the inter-bank market for this purpose. The combined impact of all this is that the rupee is recovering past of its lost ground to the dollar.
It has risen from 61.36 on Saturday last (October 30) to 60.25 a dollar on Friday, registering a big 1.8 per cent gain. But even at its current parity it shows a total loss of 3.7 per cent against the dollar since July this year.
