Rupee Rises
KARACHI: The central bank reported a 0.48% rupee depreciation against the dollar in the interbank market, closing at Rs307.10 for the second consecutive session.
However, in the open market, after a crackdown on illegal money changers in Peshawar, the dollar witnessed a surprising drop of up to Rs7.
Despite assurances from the interim government regarding a $70 billion investment from friendly nations, the rupee weakened in the interbank market. The currency market responded to demand and supply dynamics rather than official assurances.
Importers, bound to arrange dollars before opening LCs, faced restrictions on imports. In contrast, the open market experienced a surprise as the dollar declined by Rs5 to Rs7.
The Exchange Companies Association of Pakistan (ECAP) reported a closing dollar rate at Rs323, while the Forex Association of Pakistan reported a closing price of Rs320.
Currency experts attributed the open market’s shift to a crackdown on two unlicensed currency dealers in Peshawar. This move was seen as a government signal to lower dollar rates in the open market and combat smuggling.
The grey market, offering dollars at significantly higher rates, had led to reduced remittances and export proceeds in the previous fiscal year.
The caretaker government faces pressure from the International Monetary Fund to narrow the difference in dollar rates to 1.25%, which had recently risen to 9%. The gap remains above 5%.
The Federal Investigation Agency closely monitors exchange companies, with several losing licenses for violating State Bank of Pakistan’s business rules.
Previously, the quoted rates from representative organizations of exchange companies did not reflect the actual market availability. Overall, there is an unexpected Surge as Rupee rises in Kerb Market but Slips in Interbank.
