Injection or not - the rupee slide explained
By Ariba Shahid
T
here is a lot of buzz surrounding the rupee’s slide against the dollar and more importantly of an injection by the SBP into the forex market. In a scoop, Shehbaz Rana in the Express Tribune claims that the SBP pumped $1.2 billion into the interbank market in three months to defend the weakening rupee. The Pakistani rupee on Wednesday continued its slide against the greenback, touching a new all-time low for the second straight day at 169.5 in the interbank market at the onset of trading session. The local currency had closed at an all-time low value of Rs168.94 a day earlier, on Tuesday. The rupee depreciated by 45 paisa against the greenback and was being quoted at 169.10 to 169.50 while trades were reported at 169.50. The rupee, which has been termed the
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“Usually, during volatility, the SBP used to issue statements explaining the reasons. However, they have gone into sleep mode. As per the last policy statement SBP stated that depreciation witnessed in the rupee is due to higher commodities prices and depreciation of regional currencies against the USD” Waqas Hussain, head of sales at Tresmark worst-performing currency in Asia, seems to have opened the field for the bullish US dollar to move forward unchecked and erode the remaining value of the local currency, maintaining downturn since it touched a 22-month high of Rs152.27 in May 2021, losing a cumulative Rs17.36 in the past four months. So is there any way to actually confirm
an injection? If we’re being candid, there is no way to know for sure unless the SBP confirms it. Sources inside the SBP can hint towards it, but one can never be too sure. “SBP does not comment on speculations about market interventions,” said Qamar. That means that official confirmation is not a possibility. However, they have also made
