KARACHI, Nov 19: The rupee on Tuesday lost eight paisa to a US dollar in the inter-bank market. Bankers said the rupee closed at 58.57/58.58 against the previous closing of 58.49/58.50.

On Monday also the rupee had lost nine paisa to a US dollar in the inter-bank market. So within two days the local currency has shed 17 paisa to the US unit. Bankers attribute this fall to the State Bank dollar buying either directly or through banks.

Last week the rupee had gained 36 paisa against the dollar on increased inflow of foreign currency and the SBP had to watch the dollar fall in silence.

But it seems that after watching the dollar hit the bottom the central bank decided to prop it up. The propping up is necessary not only to benefit the exporters but to recover the losses that the SBP has incurred on foreign exchange dealings with the bank.

Bankers say the dollars being bought by the SBP might be used for forward selling in near future to cover the exchange losses.

Some bankers say the rupee lost some value in two days on the importers demand for dollars. They say the importers who had not been buying forward dollars for some time came in the market as they felt that the US unit had touched the bottom and may remain stable for some time.

The higher level of rupee liquidity in the inter-bank market is also responsible for the fall of the local currency.