KARACHI, May 20: High aspirations attached with the general elections could not maintain the elevated spirit of the currency market, and the local currency has further slipped.

Experts and currency market dealers said that the market has lost pre-election sentiment, but there was more than one reason for it.

They said global investors have once again focused their attention to US dollar which they believe was the only global currency with stability.

Investors have been coming out from gold, oil and euro to buy dollars, they said.

During a year, the gold lost 25 per cent value while it was currently being traded at $1360 per ounce. It was $1800 per ounce a year back.

“The huge disinvestment from gold has joined US dollar, strengthening the currency against all major currencies, including rupee,” said Anwar Jamal, a currency dealer in the open market.

The greenback got Rs100 as permanent exchange rate in the open market while the inter-bank currency market was relatively stronger.

Dealers in the inter-bank market said no panic was being witnessed despite uncertainties on both political and economic fronts. “The trading is normal, and there is no panic. However, trading is slow that shows less market activities because of importers’ cautious movement,” said Atif Ahmed, a currency dealer in the inter-bank market.

The trade data of last 10 months of the current fiscal year shows that both imports and exports were almost in the range of previous year.

No significant growth was seen except that imports fell by $300m during this period compared to last year.

Some bankers noted that despite very low foreign exchange reserves of the State Bank, the inter-bank currency market was doing well with balanced trading and exchange rate.

Bankers believe that market behaviour reflects confidence in the future government, and it was not witnessing panic.

However, Malik Bostan, Chairman, Exchange Companies Association of Pakistan, identified another reason for upset in the open market where dollar appreciated and demand was still high.

“We are facing a reverse trend in Pakistan since gold is being imported in this country while global investors are coming out from this metal business,” said Bostan.

He said no Letters of Credit are opened for import of gold which means that importers have to buy dollars from open market to buy gold.

“The gold price fell to Rs51,000 per tola from Rs57,000 within a few months, which is an attraction for Pakistanis, particularly for those who sold out their holdings while the price was high,” said Bostan.

He was hopeful that friend countries’ help and changed economic strategies with the installation of a new government may bring a change in the situation.

The currency experts said if gold price goes up, it will attract dollar in the open market and investors would leave the greenback to shed some weight against other currencies.

It may help local currency also.