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SBP says dollar movement to correct imbalances in external account

SBP says dollar movement to correct imbalances in external account

KARACHI: The dollar increased by as much as Rs11.70 in the interbank market on Tuesday, before closing at Rs133.64.

It had closed the previous day at Rs124.27 to the dollar.

The State Bank of Pakistan (SBP) explained the move as reflective of current account dynamics and a demand-supply gap in the foreign exchange market.

“Although the current account deficit narrowed in August 2018, a consistent increase in the oil import bill on account of rising international oil prices has exerted pressure in the foreign exchange market,” the central bank said in a statement.

“The SBP is of the view that this adjustment in the exchange rate along with lagged impact of recent hikes in the policy rate and other policy measures to contain imports will correct the imbalances in the external account,” it continued.

The SBP will continue to closely monitor the situation and stand ready to intervene in case of any unwarranted volatility in the foreign exchange market,” it concluded.