KARACHI, Feb 3: The US dollar remained stable last month but in seven months of this fiscal year to January 2003 it lost 2.9 per cent value in inter-bank market and 3.7 per cent in the open market.

On January 31, the dollar fell to Rs58.30 in the inter-bank market down from Rs60.05 on the last working day of June 2002.

In the open market also, the US unit went down to Rs58 from Rs60.25. But the greenback had recorded much of this fall in July/December and in January 2003 it remained somewhat stable though it had touched much lower levels than seen at the month- end on certain days. In January the dollar lost only five paisa in inter-bank market and 10 paisa in the open currency market.

Bankers say the State Bank kept the dollar stable in inter- bank market by frequently mopping up excess supply from banks to benefit the exporters. Currency dealers said the dollar remained stable in the open market mirroring the trend in the inter-bank market and also because of the fact that the State Bank stopped direct dollar buying from money changers in July last.

In its first-of-its-kind monetary policy statement issued last week, the State Bank has indicated to keep the monetary policy stance stable in rest of this fiscal year and has also indicated a gradual strengthening of the rupee. “This means the dollar is set to fall further,” says a local banker. “But the magnitude of the fall would not be too large—and the timing of the fall would not be too odd to create problems for the exporters.”

The indication coming from the SBP on gradual strengthening of the rupee is hard to be translated into the exact possible fall of the dollar in the months to come. But many exporters project the dollar around Rs 56/57 by the end of this fiscal year.