Pakistan central bank to complete probe soon into alleged FX manipulation by banks

Pakistan’s central bank will soon complete an investigation into alleged manipulation by commercial banks of foreign exchange operations in the country, an official said on Wednesday.

Pakistan’s rupee has fluctuated wildly this year, particularly recently, hitting record lows against the U.S. dollar last month before suddenly rising in recent days, leading authorities to suspect manipulation by banks and exchange companies. “The investigations are being carried out by the regulator and results might come soon,” the chief spokesperson for the State Bank of Pakistan (SBP), Abid Qamar, told Reuters.

He said he could not give an exact date for the completion, but said the probe had started some time back during the tenure of the previous finance minister. The rupee is currently at around 223.94 to the U.S. dollar, down around 20% in 2022. It had lost 27% at one stage, hitting a low of 220 on Aug. 31.

A parliamentary committee on Tuesday directed the SBP to take appropriate action against all banks and exchange companies involved in volatility in the exchange rate in recent weeks. In 16 sessions up to Sept. 22, the rupee lost close to 9% against the dollar. Since then, it has gained about 7%, without any changes in economic fundamentals.

The rupee gains coincided with the return of Ishaq Dar as finance minister for his fourth stint. Dar has strongly favoured intervention in currency markets and has come down hard on exchange speculation in the past.

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