SBP intervention limits rupee’s fall after cap lifted

The rupee dipped by 1.2 per cent to 243 against the dollar on Wednesday after foreign exchange companies lifted a price cap, which they said caused “artificial” distortions and created a black market, where the US currency was selling at higher rates. However, the rupee’s closing value was far higher compared to Rs252.5 in the early open-market trade on Wednesday after central bank’s intervention. On Tuesday, the dollar sold at Rs240.75 in the open market. The Exchange Companies Association of Pakistan (ECAP) said on Tuesday it was removing the cap on the currency and would meet State Bank of Pakistan’s (SBP) officials on Wednesday. “We have decided that we will bring the exchange rate on a par with what we are supplying to the banks against credit cards,” ECAP Secretary General Zafar Paracha said in a statement, adding that the level is 255 to 256 rupees to the dollar.