Dollar drops to Rs157.50 in open market

KARACHI: The US dollar dropped further in the interbank and open markets on Tuesday, with the Pakistani currency recovering from historic lows since the central bank intervened last week.

On Tuesday, the US dollar dipped by Rs2.30 in the interbank to be traded at Rs157.75. Similarly, it dropped by Rs3.50 to fall to Rs157.50 in the open market at the end of the day's trading.

Last week, the greenback hit record highs of Rs164.05 in the interbank and Rs164.50 in the open market.

But on Friday, the rupee rebounded sharply, posting its biggest daily percentage gain in years after the State Bank of Pakistan sold foreign currency in "quite a sizeable amount" to pull the exchange rate back from an all-time low.

Traders said the rupee strengthened on the back of an apparent intervention from the central bank following Prime Minister Imran Khan's meeting with SBP Governor Dr Reza Baqir on Wednesday.

SBP Governor Dr Reza Baqir has said the central bank has adopted a market-based exchange rate system for the rupee, considering demand and supply factors. However, the SBP would intervene to curb excessive volatility in the market.

Forex dealers have been expecting the currency market to settle with the start of the new month as further foreign inflows, due July onwards, may ease pressure on the country's foreign exchange reserves.