“If the government’s policies are not on one page then it would be impossible to get the desired results … We should learn from the example of Sri Lanka that trying to control the market would only increase the prices in the grey market even further. He said the government’s policies concerning the foreign exchange market were in conflict with each other and “blaming anyone would not solve the problem.” “If the circular is implemented properly then the gap (between the interbank and open market dollar rate) can fall,” Paracha said. While that seemed to be happening a day after the central bank’s announcement, Paracha noted that today the price had taken the opposite direction, with the local currency losing Rs5. Analysts had expected this move to narrow the dollar price spread, which had risen to almost Rs30, between the kerb and interbank markets. He said that the State Bank of Pakistan’s (SBP) strategy to allow banks to acquire US dollars from the interbank market for the settlement of card-based cross-border transactions with the International Payment System should have brought down the price by around Rs10 to Rs20.įollowing this allowance by the central bank on Wednesday (May 31), the rupee had gained around Rs15 in the open market the next day. “People who have bought the currency at up to Rs310 are not selling, they are going for the wait-and-see strategy,” said Zafar Paracha, general secretary of the Exchange Companies Association of Pakistan. The rupee fell 2.6 per cent against the US dollar in the open market on Monday, changing course after appreciating sharply towards the end of last week.Īccording to the Exchange Companies Association of Pakistan, the greenback closed at Rs308 in the open market, an increase of Rs8 from Friday’s close.Īnalysts said today’s price movement came on the back of a shortage of dollars in the open market, attributing it to “hoarders” holding onto the foreign currency in anticipation of further depreciation of the rupee.
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