Dollar Trading Between Rs.118 And Rs.118.30 Higher Than Inter-Bank Market Rate
Dollar Trading Between Rs.118 And Rs.118.30 Higher Than Inter-Bank Market Rate: Within a week, the dollar has appreciated by 2.2% against the rupee. On Monday, the US currency traded between Rs.118 and Rs.118.30 in the Kerb market. The dollar is selling around Rs.2.70 higher compared to inter-bank market rates.
The State Bank of Pakistan (SBP) had an emergency meeting with the currency dealers to check rising dollar prices in the open market.
The Exchange Companies Association of Pakistan (ECAP) stated in a press statement that it supported the SBP’s the measures to improve dollar supplies to bring down dollar rates. Within a week, the dollar has appreciated by 2.2 per cent against the rupee.
High demand and short supply of dollar has been pushing up its rates in the open market. Traders and dealers shared that general public is not selling their dollar holdings while the import of the currency has drastically reduced.
Due to falling reserves, the SBP is not in a position to offer dollars to the open market to bridge the gap between supply and demand. Previously, the SBP used to provide dollars to improve supply for stabilizing exchange rate.
According to the press release, the SBP claimed that there was no shortage of dollars and the supplies of cash are available in any quantity with SBP and exchange companies.
In the local currency market last week, the rupee/dollar equation traded almost flat on the inter-bank market. However, the rupee in the open market came under pressure against the dollar as an unexpected rise in dollar demand dragged the rupee value to historic lows due to short dollar supplies.
Trading in currency in the open market remained volatile throughout last week. The differential in the interbank and open market dollar rates have risen from 95 paisa to Rs.1.73 in just one week.
State Bank of Pakistan has warned dealers against betting on depreciation of rupee, asking them to strengthen the tormented local currency as plenty of liquidity is available in the open market to meet foreign exchange demand.
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