The dollar-Rupee exchange rate gap widens to Rs 27 in the open market vs interbank
ISLAMABAD: The gap between the interbank and the open market exchange rate of the dollar versus Pakistani rupees widened to a record high of Rs 27 on Wednesday morning.
In interbank trading, the dollar-rupee exchange rate fluctuated around Rs 285 while in the open market, the exchange rate has expanded to Rs 311.
It shows the State Bank of Pakistan and the government are totally indifferent to the illogical and unbelievable exchange rate gap in interbank and open market trading.
This wide gap will influence overseas Pakistanis and currency dealers to use illegal channels for the transfer of foreign exchange to Pakistan.
For example, if a person received dollars through the banking channel, he would get Rs 285 per dollar. And if the same person receives the foreign currency through an illegal channel, he/she would receive Rs 311 per dollar.
Another drawback of the current exchange rate in the open market is that it will increase the cost of imports, visa fees, foreign trips, etc. It is because the individuals are supposed to get US dollars and other foreign currencies from the open market to pay visa fees and take additional money with them for foreign trips.
Meanwhile, when importers will pay a high rate of the US dollar, they will, no doubt, pass on this impact to the consumers in the country.
Foreign Exchange Reserves
The exchange reserves of Pakistan are fluctuating around $9.7 billion in May 2023. The foreign currency reserves comprised securities, currency, and deposits held with other central bank and domestic commercial banks.
Pakistan’s other foreign currency assets, which were not included in official reserve assets, amounted to $101.05 million and included securities, deposits, loans, financial derivatives, gold, and others.
The report also indicated that Pakistan’s aggregate short and long positions in forwards and futures in foreign currencies vis-à-vis the domestic currency, including the forward leg of currency swaps, amounted to $4.8bn. Of this amount, short positions accounted for the majority of the outflows, amounting to $4.86bn, while long positions amounted to $55mn.
