Dollar hits 318
ISLAMABAD: In the open market, the foreign exchange companies sold the US dollar at 318 rupees on Friday, the highest-ever so far.
The companies bought the dollar at 315 and sold at 318. Thus the PKR continues to face pressure as the removal of restrictions on letters of credit (LCs) has triggered PKR depreciation.
Meanwhile, the inter-bank and open market trading rate gad also widened to 17 rupees on Friday. The banks traded the dollar at 301 while the open market traded it at 318 rupees on August 25.
The exchange rate in the open market greatly impacts the masses in the country. The banks do not provide foreign exchange to individuals and the open market is the only option for them to buy the dollars and other currencies.
Tourists, students, and small importers have to buy the dollar and other currencies from foreign exchange companies.
Furthermore, more devaluation means more price hikes as the previous government has signed a deal with the IMF to pass on to consumers the impact of the increase in the rates of essential consumer items, including electricity, gas, and petroleum products, etc.
Meanwhile, according to Mettis Global, the PKR depreciated by 78 paisas against the US dollar in Friday’s interbank session. The greenback settled at 301 compared to the previous closing of PKR 300/USD.
Recalling the IMF staff report, a market-determined exchange rate was recommended to absorb external pressures. Consequently, this mechanism ended the government’s ability to control the rupee value through trade restrictions.
Additionally, the PKR faces pressure amid political uncertainty surrounding the general elections.
Notably, the rupee has depreciated to 300 rupees, from the 200 rupees level in the past 15 months.
During the last week, PKR depreciated by 5.22 rupees or 1.74% compared to the previous week’s closing of 295.78.
