ISLAMABAD – The government imposed a limit on the spread between buying and selling foreign currencies on Tuesday in an apparent effort to stop speculation as the rupee comes under pressure.

Traders would only be allowed to offer a 25-paisa difference in the price between buying and selling, the State Bank of Pakistan (SBP) said in a statement. The rupee ended trading on Tuesday at 98.06/98.11 against the dollar, compared to Monday's close of 97.96/98.01. At the end of 2012, the currency stood at 97.18/97.23 to the dollar.
"The measure is in continuation of SBP efforts to improve market efficiency and protect customers from exploitation," SBP spokesman Syed Wasimuddin said. A trader said the limit had probably been imposed to stop currency speculation that might further weaken the rupee.
The rupee is coming under increasing strain as Pakistan makes loan repayments to the International Monetary Fund. The most recent payment, of $145 million, was made on Monday. Pakistan has just over $6 billion left to repay.
SBP currently has about $9 billion, enough to cover about two months' worth of imports. The IMF has said it will not discuss postponing repayments unless Pakistan enacts serious financial reforms, especially broadening its tax base.