US dollar rises by Rs1.07 in the interbank market

ISLAMABAD: The US dollar continued to appreciate against the Pakistani rupee rising by Rs1.07 in the interbank market on Monday.

According to the State Bank of Pakistan (SBP), the dollar appreciated by Rs1.07 and closed at Rs237.91 – depreciating by 0.45 percent.

Interbank closing #ExchangeRate for todayhttps://t.co/xI9H9BNNY1 pic.twitter.com/JVigeDlFRg

— SBP (@StateBank_Pak) September 19, 2022

As per the Forex Association of Pakistan (FAP) the US dollar was being traded at Rs242 to Rs245 in the open market.

As reported in Dawn Saad bin Naseer, director of financial data and analytics portal Mettis Global, said the decline was reflective of the overall demand and supply situation in the market. The rupee did not react to news of the Saudi Fund for Development rolling over a $3 billion deposit for a year because the development “did not improve the liquidity of the dollar in the market”.

Naseer said the government would have to step in to stop further decline in the rupee’s value. He recommended that the government decrease the time period given to exporters to bring their proceeds into the country.

Many exporters hold their payments abroad, anticipating that the greenback’s value will rise in Pakistan, at which point they will bring back their money. This often exacerbates dollar shortage in the country.

Naseer also urged the government to “ensure the exchange rate is fixed for exporters on the day they realize their proceeds”, a step that will discourage them from holding on to dollars for longer periods in anticipation of making profit on exchange rate fluctuations.

It is pertinent to mention here that the rupee weakened by Rs8.66 against the US dollar in the interbank currency market in the previous week.