KARACHI: A crackdown on illegal money exchanges during the last few months and a smooth supply to the Exchange Companies from the banking sector have supported the Pakistani Rupee in the open currency market, which closed at Rs126.50 for buying and Rs127.00 in the open currency market on Friday evening.
In the interbank market, the Greenback closed at Rs127.80 for buying and Rs128.00 for selling compared to Rs128.50 for buying and Rs128.80 for selling before election 2018. The Pak-Rupee appreciated by 80 paisas in last two days.
“On the directives of the State Bank of Pakistan (SBP), all the borders, especially the Afghanistan border have been sealed before the election 2018 which could be a major reason of higher supply in the open currency market,” said the president of Exchange Companies Association of Pakistan (ECAP) Zafar Paracha. There is no demand of the dollar in the open-market for last two days, he added.
“The Rupee may further appreciate against the dollar in the open market in the future as the supply of dollar is higher compared to the previous week,” said the president of Forex Market, Malik Bostan.
“In last two days, the exchange companies have deposited an amount of $3 million in the interbank market,” Bostan claimed. There was no demand of the US dollar at the counters while the people are selling it owing to its prospectively weak demand in future, he claimed.
Recently, the central bank has further imposed 100 per cent cash margin on the import of 131 items, which was an additional list of 731 items on which Federal Board of Revenue (FBR) had already imposed a higher regulatory duty, the market experts said.
Previous and present representatives of federal governments have been trying to control trade deficit through different tactics, which had crossed by around $37 billion in 2017-18.
In a recent statement, expected Finance Minister Asad Umer has claimed on a TV programme that the government of Pakistan Tehreek Insaaf (PTI) will not support the dollar in interbank and open currency markets and will try to bring it down at reasonable rates.
Asad Umer did not claim that his government will go to the International Monetary Fund (IMF) but said the issue of the International Monetary Fund (IMF) will be put before the party leadership.
The leading currency experts, businessmen and brokerage houses said the government need $9 billion to $15 billion to fulfil the country’s financial requirement for next five years.
The international rating agency Moody’s expects that Pakistan to turn to the IMF for external financing.
According to the market experts, it would be very difficult for the newly elected government of Pakistan to turn to the IMF again as the previous government could not fulfil many pledges made with the IMF including structural reforms and the privatisation programme, revamping the tax infrastructure and widening the tax net etc.
The State Bank’s reserves have dropped at the fastest pace in Asia to $9.10 billion, according to data compiled by the SBP.
