Pakistani rupee on Thursday witnessed 59 paisa devaluation against the US dollar in the interbank trading and closed at Rs300.22 against the previous day’s closing of Rs299.63. However, according to the Forex Association of Pakistan (FAP), the buying and selling rates of the dollar in the open market stood at Rs314 and Rs317 respectively.
According to Exchange Companies Association of Pakistan (ECAP), the USD is trading at Rs316 against the local currency in the open market taking the difference between the interbank and kerb rates to Rs15.75 – 5.25%.
On Wednesday, the currency fell to 299.64 against the USD, 0.21% lower from Tuesday’s close of 299.01. Economic expert and former adviser to finance minister Dr Khaqan Najeeb said pressure from the release of already parked containers and dropping exports and remittances are causing a dollar liquidity crunch in the economy. The interbank market, he said, is also trying to catch up with the kerb market as Pakistan has agreed to a structural benchmark with the International Monetary Fund of keeping the two markets with a difference which can not be more the 1.25% on the average in five days. “The open markets are also supply constrained but the demand stays high because the part of imports that are not fulfilled by the interbank market are also taken care of at the kerb market and because of the dollarisation because many people tend to feel that dollar is a storer value and best to hold.”
The expert also pointed out that the monetary policy has fallen behind in creating an impact on people wanting to hold the rupee as well. He added that inflows have to increase at the interbank level which is the best way to ensure that the Pakistan rupee tends to stabilise “Also the certainty on the economic plan and the future planned inflows will also help as the next tranche may not be due in the coming months,” he said. The price of the Euro increased by Rs1.87 to close at Rs 326.16 against the last day’s closing of Rs324.29, according to the State Bank of Pakistan (SBP).
