November 15, 2001	Thursday	Shaba’an 28, 1422

KARACHI, Nov 14: The US dollar regained Rs1.90 or 3 per cent in a single session in the kerb market on Wednesday. The dollar closed at Rs62.40/62.60 for spot buying and selling against the previous close of Rs60.50/ 60.70. This brings the total recovery the greenback has made this week to Rs2.40 or about 4 per cent. On the weekend the dollar had closed at Rs60.00/60.20 for spot buying and selling.

The chairman of Forex Association of Pakistan Malik M. Bostan said the dollar went up on heavy buying by the banks. “Banks bought about $25 million on behalf of their customers within three days,” he said and claimed that the figure was authentic.

“I have spoken to the State Bank Foreign Exchange Advisor Zafar Shaikh who says he would stop banks from buying dollars from the kerb market,” Bostan said when reached by Dawn over telephone.

But Zafar Shaikh refuted this. “Bostan has only informed me that the exporters are buying dollars from kerb,” he said when Dawn reached him over telephone. He said the dollar had shot up mainly because the supplies had dried up and there had been a huge speculative buying going on.

That the dollar has shot up because of speculative buying was evident from the fact that after trading as high as Rs62.60 in the afternoon it came down to Rs61.80 in the late evening. “The present rate is absolutely artificial,” insisted Zafar Shaikh and hoped that the dollar would fall further.

Bostan also shares this optimism. “I know for sure the dollar would fall but I cannot say where it would settle. It all depends on how much supply we get and how much buying takes place in the coming days.”

Bankers say exporters buy dollars from the kerb whenever the rate goes down. Since the dollar had slipped below Rs60 at the weekend many exporters bought dollars from kerb and transferred the same into their accounts showing it as realization of overdue export proceeds. Bankers said speculators and ordinary people who maintain foreign currency accounts with banks also purchased dollars from the kerb when the rate was low and sold the same into the inter-bank market.

On Saturday the dollar was selling at a lower price in the kerb market than in the inter-bank market.

Banks cannot buy dollars for themselves from the kerb market.

Bankers and money changers said speculators were out to buy dollars on Wednesday after the fall of Kabul to Northern Alliance.