(MENAFN- Khaleej Times) The State Bank of Pakistan is probing local banks' foreign-exchange trades following the rupee's worst plunge since the global financial crisis, three people familiar with the matter said.
The central bank sent inspection teams to as many as 10 commercial banks on September 27 and 28, according to one person, who asked not to be identified.
The authority asked lenders to keep head offices and treasury departments open over the weekend for inspection, according to a letter it sent to a lender. Umar Siddique, Karachi-based acting chief spokesman at the State Bank, declined to comment.
Pakistan has stepped up support for the rupee as it slid 6.1 per cent last quarter, the most since 2008, touching a record low of 108.45 per dollar on September 26. Currency losses quickened after the budget deficit reached a two-decade high of 8.8 per cent in 2012-2013. The currency tumbled as much as 1.8 per cent on September 26 before closing 1.4 per cent higher, boosting a measure of 10-day historical volatility in the exchange rate to 11.3 per cent from 4.5 per cent at the end of 2012.
The International Monetary Fund approved a $6.6 billion loan for the country last month to help stabilise the economy. The State Bank sold between $20 million and $50 million in the market to buoy the rupee, Muhammad Sohail, Karachi-based chief executive officer at Topline Securities, said on September 26.
"We take different steps that are technical in nature," to stabilise the rupee, State Bank's Siddique said on September 26, confirming the central bank's intervention.
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