KARACHI, Oct 25: The US dollar that had to lick a six-year low in the international currency market during this week grew weaker by nine paisa in the local inter-bank market and by 45 paisa in the open market.

Senior bankers said the mid-rate of the dollar fell to Rs57.43 in the inter-bank market on Saturday from the last weekend close of Rs57.52. And open market dealers said the US unit came down to Rs57.35/Rs57.40 for spot buying and selling on Saturday. Last weekend it had closed at Rs57.80/Rs57.85.

Thus after several months the gap between the inter-bank and open market exchange rates of the dollar — rather the dollar became cheaper in the inter-bank market than in the open market. Currency dealers say that this will help Pakistan attract more remittances from overseas Pakistanis through official channel.

“The dollar has come down primarily because the State Bank has decided to defend it at a new level — many people believe it to be Rs57.40,” said treasurer of a local bank. But he went on to add that the decline of the dollar in Pakistan’s inter-bank market is well-aligned with its historic fall against major currencies in the world market. The State Bank has been supporting the US unit for the benefit of the exporters for two years, but it does allow a nominal fall in the dollar value every three months or so just to ward off the economic ills of keeping the rupee weaker for a long time.

In the first quarter of this fiscal year, the State Bank kept the dollar quite stable and the US unit price remained rangebound between Rs57.85-Rs57.90. But with the start of a new quarter in October, the central bank reduced its level of support and let the greenback throw off some extra weight against the local currency. As a result, the dollar has so far shed 45 paisa against the rupee in the inter-bank market, coming down from Rs57.88 on October 1 to Rs57.43 on October 25.

The SBP policy of allowing a nominal fall in the dollar value had an immediate impact also on the open currency market where the US unit started slipping against the rupee. So far this month the dollar had shed 60 paisa or more than one per cent of its value against the local currency, coming down from Rs57.95/Rs58.00 on October 1 to Rs57.35/Rs57.40 on October 25. In the first quarter of this fiscal year, the dollar remained pegged around Rs57.85/ Rs57.95 — reflecting again the stable trend seen in the inter-bank market.

“The dollar has been on the fall this week primarily because there is no demand for it,” said Owais Kalia of KKI Exchange Co.

“Besides, it has been on the decline in the inter-bank market and has also come under heavy battering by major currencies the world over,” he said. On Thursday, the US dollar hit a six-year low against an index of leading currencies and a five-year low against sterling as investors switched over from US equities to other hard currencies.

PRE-EID INFLOWS: Anwar Jamal of Galaxy Exchange Co said the US dollar had been on the fall also because overseas Pakistanis were sending more money back home before Eid. “Those who are coming back are also bringing with them enough foreign exchange,” he added. Half-a-dozen exchange companies buy all non- dollar currencies