Dollar loses Rs5 in open market

KARACHI: The rupee turned in a mixed performance on Tuesday as it recovered to Rs303 in the open market, but suffered slight losses in the interbank market due to persisting confusion about the country’s economic direction.

However, the dollar’s quoted price was lower than the available price. Currency dealers said the price was not lower than Rs306 per dollar while availability of the dollar was not common.

The closing price of dollar in the open market was Rs303 on Tuesday — a gain of Rs 5 for PKR over the previous day’s Rs308.

The shortage of dollars has been a permanent feature of the open market since inflows dried up from all possible sources. Due to a grey market that offers Rs320 per dollar, the remittances from exchange companies have almost reduced to zero.

“The general public is also reluctant to sell their dollars or other foreign currencies due to fluctuation in the dollar rates,” said a currency dealer. He said the currency market had shrunk to the lowest level.

“The open market is so thin that an inflow of just one hundred thousand dollars could change the greenback price across the country,” said the dealer.

He said there would be no surprise if the dollar once again reaches the price it had when the State Bank allowed banks to buy the currency from interbank market instead of open market. The SBP’s decision brought down the dollar by Rs15 to Rs299 in a single day.

But currency experts believe that the State Bank’s decision, which will be applicable for two months till July 31, would not be able to produce a long-term change in the dollar prices.

The decision would help only a few thousand Pakistanis to buy the dollar at cheaper rates during the period. Buying dollar from inter-bank would benefit Rs17 to Rs20 per dollar. Currency experts said it would accelerate outflows of dollar from Pakistan.

The State Bank reported the closing price of dollar in the interbank as Rs286.56 on Tuesday, an appreciation of 37 paisa against PKR over the previous day’s Rs286.19.

Published in Dawn, June 7th, 2023