Dollar continues upward trajectory, gains Rs6.40 in inter-bank market
The dollar gained Rs6.40 against the local currency in the inter-bank market, it emerged on Monday. The US currency was being traded at Rs269 in the early morning trade – an Rs38.85 jump in value in just one week.
This comes a day after the government lifted the petrol and diesel prices by Rs35 each. Finance Minister Ishaq Dar, who announced the decision, justified the hike by saying that the decrease in the rupee’s value and the increase in oil’s international prices had made the increase inevitable.
The greenback closed at 262.60 in the inter-bank market on Friday, according to the State Bank of Pakistan, after the currency dealers removed the unofficial “dollar cap”.
The greenback was being traded at Rs270 in the open market, sources said, adding that the value might further increase.
Facing an increasingly acute balance of payments crisis, Pakistan is desperate to secure external financing, with less than three weeks worth of import cover in its foreign exchange reserves.
An International Monetary Fund mission will visit Pakistan on January 31 to discuss the stalled ninth review of the country’s current funding programme, the lender’s resident representative said. Experts were of the view that the visit would have a positive impact on the currency as overcoming the difference in rates of the currency in open and inter-bank markets was one of their demands.
“Commercial banks ruined all this,” Nasir Hayat Magoon, former president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), told Aaj News when asked about the existing crisis of reserves and shortage of dollar.
He joined Aaj Exclusive on Sunday to speak about the economy and currency’s performance along with two other panelists having an experience in the chambers of commerce.
Magoon supported his argument by saying that it was the exporters’ dollar, not the banks, adding that extra Rs10 to Rs15 charged by the banks from buyers prompted the latter to opt for “grey market”.
The grey market is an illegal market where the exchange of currencies is being done without any license, according to Exchange Companies Association of Pakistan General Secretary Zafar Paracha.
It further led to the flow of dollars out of Pakistan through other illegal channels, Hawala and Hundi, the FPCCI former president added. He was of the view that panic in the market also caused this.
Magoon blamed the commercial banks for the crisis.
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