KARACHI – The State Bank of Pakistan (SBP) expressed serious concerns overspeculation by banks in the currency business, saying they were involved inthe multibillion-rupee game.
Banking sources said a high-level meeting, chaired by SBP Governor Dr RezaBaqir and attended by presidents of at least top ten banks, was held in theState Bank on Thursday.
The SBP governor expressed serious concern over the exchange ratedestabilisation and held bank treasurers responsible for speculativepractices. Banks denied the allegation but assured the governor of theirfull support to keep such activities in check in the future.
A steep fall in the rupee’s value against the dollar has not onlydestabilised the exchange rate but it has also made it difficult for thecentral bank to handle the situation with its own free-float exchange ratemechanism.
International currency watchers describe the rupee as the worst performerthis year, as the currency has fallen 13.4 per cent against the dollarsince the beginning of the current fiscal year.
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Market sources say currency dealers in banks are minting money with sharpfluctuations in the rupee-dollar prices. Bankers deny such allegations butexperts watching the currency movement are sure that banks are involved.
In its upward journey this year, the dollar has faced a series offluctuations, providing room for currency speculations.
The dollar’s recent rise has been attributed to several factors, includinga trade deficit of $15 billion during the four months through October, arise in the current account deficit which exceeded the annual target duringthe first quarter; and a change of government in Kabul which led to dollarsmuggling to the other side of the border.
