The Pakistani rupee gained Rs 1.70 against the greenback in the interbank market on Tuesday losing at Rs 103.50 for buying and Rs 103.60 for selling.
“There is ample supply of dollar in the interbank market for the last two days,” a market expert said. The dollar fluctuated throughout the day and closed around Rs 103.50, he said.
The sources in banks said that they could not say for certain but the government and the State Bank could be behind this depreciation of the greenback, which was moving up in the open market last week and had touched Rs 108 against the local currency.
A banker said that the reserves of the country had unofficially touched $21 billion as claimed by Finance Minister Ishaq Dar and it would further rise by the end of this month. The IMF’s 9th loan tranche will be received in the last week of December, he added. According to SBP figure, the reserves stood at $19.84 billion on last Thursday.
He further said that the rating of the financial sector had improved in the last five months and the EIU Report attributed the improvement in Pakistan’s rating to consistency, top level commitment and major financial inclusion initiatives implemented by State Bank of Pakistan during the year.
“They have no pressure of bulk payments of import receipts and the banks are easily paying all payments for the last one week,” a treasury department official of a private bank said and added that if the trend continued, dollar would slide further in the interbank in future.
According to the bankers, the banks are making payments of $3-$4 million of imports receipt regularly.
In the morning, the dollar opened at $105.20 against the local currency in the interbank and closed at $103.50 for buying and $103.60 for selling.
In the open currency market, the dollar also depreciated against the local currency closing at Rs 104.70 for buying and Rs 105.20 for selling. The rupee gained around Rs 1.30 against the dollar during the trading.
Exchange Companies Association of Pakistan (ECAP) Secretary Zafar Paracha commented, “The Exchange Companies are fully cooperating with the local banks to overcome the demand of the dollar.”
According to him, the rupee appreciated against the greenback as the country’s reserves are in good condition and it would further improve because of the government’s policies.
Experts say that decreased dollar value is not only lessening imported goods’ cost but also cutting the burden of foreign loans.
He said that the exchange companies were importing $500 million dollar daily to meet the public demand in the open currency market and if the dollar came down further in the interbank, the exchange companies would also reduce the exchange rates in kerb market.