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KARACHI, March 4: The US dollar on Monday touched Rs 60.20 for selling in the inter-bank market and Rs 60.10 in the open market.
Senior bankers said the greenback closed at Rs60.18/Rs60.20 for ready buying and selling against weekend’s close of Rs60.16/ Rs60.18. They said the dollar moved up on payment of oil import bills.
They said though the absolute increase in the dollar value was negligible, the Rs60.20 was a level seen by many as crucial. “We believe the dollar is going to stay at this level or may even go up in the coming days,” said treasurer of a leading foreign bank.
Several other bankers reached by Dawn shared this view. “The central bank is not going to let the dollar fall despite the fact that it can do so,” said a local banker. Finance Minister Shaukat Aziz said last month that the SBP had held the dollar firm to benefit exporters suggesting that the net worth of the greenback is much lesser than what it is.
The minister made this remark on the basis of the briefing he got from the central bankers who do not fully subscribe to the common perception that holding the dollar firm is good for the economy. “Time has showed that the exchange rate impact on export is much lesser than what is anticipated,” said one of the central bankers. “On the other hand the stock of external debt falls considerably whenever the greenback records a major fall.”
Whereas some bankers feel that the dollar would remain firm due to continuing support by the SBP, others think that quarter- end payments midst low inflow of export proceeds should keep it strong. “Exporters have sold out much of their export proceeds in advance so this source of dollar inflow is going to dry up,” says a foreign banker. “So it is natural for the greenback to remain strong in coming days.”
But central bankers say with the foreign exchange reserves at a high level of $5 billion (of which more than $3.3 billion is with the SBP) the quarter-end payments should not be a problem.
“We have enough to make external debt payments, and the market has the depth to absorb whatever corporate and portfolio payment will have to be made,” said one of the central bankers. He would not disclose, however, how much Pakistan will have to pay in debt servicing at end-March after the recent rescheduling of external loans.
KERB MARKET: In the kerb market the dollar rose to Rs60/ Rs 60.10 on Monday from weekend’s close of Rs 59.95/Rs 60.05.
President of Forex Association of Pakistan Malik Bostan said rise of the dollar in the inter-bank market mirrored in kerb dealings.
Leading currency dealers say the fact that the greenback has crossed Rs60 in the kerb after sailing for several weeks below this level shows that the hard currency may gain more strength in the coming days.
“I cannot say if the dollar would move further up or not but we all know that the supply of dollar has started falling with the return of overseas Pakistanis who have come home to celebrate Eid,” said Bostan.
Tens of thousands of Pakistani expatriates bring with them millions of dollars back home and sell the same in the open market to get rupees when they come to celebrate Eid.
On return many of them repurchase some dollars to meet the travelling cost.
“This time around there is more buying pressure by such people as none of them is interested in buying travellers cheques,” said Bostan. Travellers cheques have lost their charm as dollar is now available at a cheaper rate in the open market than in the inter- bank market.
