Pakistani rupee continues to remain in negative balance against dollar on the back of a strong demand for greenback on the inter-bank market. As the day dawned on Wednesday rupee nosedived to, what the bank dealers called, a record low of Rs89.36 to a dollar due to importers’ panic buying on inter-bank market to clear import payment ranging between $40 million and $45 million. The most-visited website, forex.com.pk, reported that at 3:40pm rupee-dollar parity stood at 89.3 (buying) and 89.85 (selling) on the open market where, money exchangers say, demand for dollars was normal. Rupee is said to have depreciated by over 2 per cent during the single month of November.
A bleak outlook for the country’s ailing economy is said to be another attributive factor for rupee’s ongoing downward trend against the US currency. Against government’s 4.2 per cent target for fiscal year 2011-12, International Monetary Fund (IMF) has forecasted economy in Pakistan to grow at 3.5 per cent.
Dealers on currency market, however, view otherwise. Malik Bostan, Chairman Exchange Companies Association of Pakistan (ECAP) told Profit that rupee, although weaker, remained range-bound on Wednesday and did not hit the record low. “It had dropped to the record low of 89.45 before the two-day holiday (on Friday),” the money exchanger said and added that, “Today it traded in the range of 89.35 and 89.40 which is not a record.”
ECAP chief cited renewed Pak-US diplomatic tensions and the resultant flight of capital, forward booking by the panicked importers on the inter-bank market and an uncertain policy stance on the part of state bank about fate of rupee as attributive factors for current currency crisis. “Foreign investors are withdrawing their investment due to heightening tensions between the US and Pakistan. Importers are also buying six-month LCs (Letter of Credits) at Rs93,” Bostan said.
