- Rupee losing power as Dollar moves up after rise in its demand for oil payments, rising international oil prices also facilitate rate increase
Despite improvement in reserves and other economic indicators of Pakistan, the Rupee has started to weaken in Pakistan while the US currency will further improve its position till end of next June this year, analysts said.
The US currency touched Rs 103.55 for buying and Rs 103.80 for selling in the open currency market, gaining Rs 1.55 to Rs 1.80 against the Rupee while the interbank rates touched Rs 102.05 for buying and Rs 102.35 for selling.
A dealer in NBP Exchange Company said, “Rising international oil prices is one of the big reasons of the greenback increase in Pakistan.” The dollar went up suddenly in last two-three weeks as its demand increased in the open and interbank markets.
Analyst of a brokerage house said that the tension between Saudi Arab and Yaman may further increase pressure on the Dollar and it may touch Rs 105 by the end of June.
“The private importers are also picking US Dollar from open currency market to finalise their payments,” an analyst said.
“The fiscal ending period has come now and big oil companies operating in Pakistan are now ordering for the oil payments,” said a treasure officer in a private bank.
The dollar was stable in the open currency and interbank market for last 16 months as the central bank was supporting Pak Rupee.
He said the oil prices have already touched five-month high. The oil import payment is fully met by the private sector which has to purchase dollars from the inter-bank market. Last year, the country’s oil import bill stood at $14.8 billion.
The bankers said the demand for Dollar is coming from the oil marketing companies, telecom and other sectors and the inflows of dollar are thin. “The jump in oil prices to $65 per barrel on last Friday from below $50 a couple of weeks back can change the scenario of greenback in Pakistan,” said analyst.
The interbank market shows little signs of pressure, but the State Bank will try keep the dollar below Rs 102 during a couple of weeks , the analyst told Pakistan Today.
Pakistan total reserves increased to $17.749 on May 15, while the State Bank reserves stood at $12.511, which is around 100 percent up compared with May 2014.
The International Monetary Fund (IMF) will release $506 million to Pakistan under EFF arrangement after a final approval from its executive board in June 2015, which would further boost Pakistan’s reserves.
The inflows of Pakistani remittances stood at $14.96 billion in first ten month of the current fiscal year, showing a significant growth of 16.06 percent as compared with $12.898 billion received in the same period last year.
Pakistan’s export stood at $19.92 billion in July-April 2015, while the imports were recorded at whooping $37.85 billion.