As Pakistani rupee continues to drop, its central bank injects USD 1.2 bn into inter-bank market

The State Bank of Pakistan (SBP) has injected nearly USD1.2 billion into the inter-bank market in three months to defend the weakening rupee, local media reported on Wednesday.

From mid-June to the first week of September, the central bank injected nearly $1.2 billion out of its reserves. The maximum single-day injection of USD100 million was made in July, followed by USD85 million in August, The Express Tribune reported on Wednesday.

However, the central bank, International Monetary Fund (IMF) and finance ministry institutions claim that the rupee value is determined by market forces.

In an attempt to maintain an artificial value of the rupee, with the fresh injection, nearly USD5.8 billion has been thrown in the inter-bank market during the tenure of the Pakistan Tehreek-e-Insaf (PTI) government.

However, neither the finance ministry nor the central bank explicitly denied that the SBP threw dollars in the market to defend the rupee.

On Tuesday, the Pakistani rupee hit an all-time low of Rs 168.94 against the US dollar in the inter-bank market.

The rupee has lost 7.28 per cent or Rs 11.51 to date since the start of the current fiscal year on July 1, 2021. This was despite the fact that since July the SBP threw USD815 million in the exchange market, according to The Express Tribune.

( With inputs from ANI )