KARACHI: The government succeeded in bringing back the dollar to Rs98 on Wednesday, leaving no doubt that the high inflows were the real force behind greenback’s devaluation.

The dollar dipped below Rs98 in both inter-bank and open markets and was traded as low as Rs97.20-40 and Rs97.60, respectively. However, the rate closed at Rs98.00-20 in the inter-bank and Rs98.30-50 in the kerb market.

Few believed when Finance Minister Ishaq Dar insisted that the US currency would fall back to 98 against the rupee. He, however, proved correct on Wednesday.

Addressing a press conference yesterday, the minister said he was confident that the economy would recover after the rupee breached the psychological 100- mark against the dollar. Bankers said the inflows of the US currency are still high as exporters are eager to sell their dollars in the earliest moment.

“The exporters were not selling their export proceeds for last three months but the sudden fall pushed them to hurry before it’s too late,” said Atif Ahmed, a currency dealer in the inter-bank market.

Bankers had no estimate about the volume of pending export proceeds, but they said average monthly export proceeds are not less than $1.5 billion which means the total pending proceeds could be more than $4bn.

Mr Ahmed said the dollar would fall further if the export proceeds continue to rush in the inter-bank market. “Only government’s intervention can stop this dollar devaluation,” he said.

The dollar has lost about 10 per cent against the local currency during the last three months. The greenback peaked at Rs108.60 on Dec 5, 2013 and is now being traded at Rs98. The rupee gained more in the open market as it was Rs110 on the same date and now it is slightly over Rs98.

“Pressure is mounting on the government, particularly by the exporters, to stop dollar devaluation,” said Anwar Jamal, a leading currency dealer in the open market.

However, exporters were not in panic except those who had dollars in stock before the currency started to fall.

“We will add cost to the product as per the value of dollar,” said Aamir Aziz, an exporter of textile-based finished products. However, he said the impact of sustainable low dollar price will ultimately benefit the exporters who use one-third imported material for exports.