September 18, 2002	Wednesday	Rajab 10, 1423

KARACHI, Sept 17: The US dollar that held firm around Rs59.50 till last month and around Rs59.30 by the weekend fell below the crucial level of Rs59.20 in the inter-bank market on Tuesday.

This happened amidst fears and hopes. Fears expressed by the exporters that a further fall in the dollar value may hurt them and hopes aired by the bankers that increased supply was sure to pull it further down.

Senior bankers said the US currency touched an intra-day low of Rs59.16/Rs59.17 on increased inflow of home remittances and low demand by importers. But by the close of the day the dollar finished trading at Rs59.19/Rs59.20 against the previous close of Rs59.26/Rs59.27.

“As an exporter I will say if the dollar sheds more value and touches Rs59 figure that would be a disturbing signal for us,” said Vice Chairman of the All Pakistan Textile Mills Association Mushtaq A. Vohra. “We know that the SBP has been keeping the US dollar stable for the exporters and we hope it will continue it,” he said when reached by Dawn over telephone.

“I think the dollar may come down to Rs59.05/Rs59.10 by the end of this week if the supply remains intact amid low demand by the importers,” said president of Financial Market Association Nasim Akbar. “It can also touch Rs59 figure after some time,” he said when Dawn reached him over telephone.

“But much will depend on whether the State Bank continues to mop up excessive inflow of dollars from the inter-bank market.”

Chances are the SBP will. “We will continue to remain in the market,” said Foreign Exchange Advisor of the SBP Zafar Shaikh implying that the central bank may keep on dollar buying from the banks. While talking to Dawn he said the dollar had come down as “economic fundamentals are in the favour of the rupee” referring to a pickup in exports and home remittances.

KERB MARKET: The fall of the dollar in the inter-bank market had an immediate impact on the kerb market where it lost six paisa to close at Rs59.06/Rs59.12. But a dealer at Wall Street currency brokerage said the dollar hit the intra-day low at Rs59.03/Rs59.07.

“This was a mere reflection of the fall of the dollar in the inter-bank market,” said Ovais Kalia of Khanani & Kalia International. “Besides there was thin activity in the market on account of IDEAS 2002 (the ongoing defence products exhibition).”