KARACHI: Rupee depreciated against dollar in both inter-bank and open market on Friday despite increasing inflows and rise in country’s foreign exchange reserves.

The local currency lost Re1 against dollar as the greenback traded at Rs142.30 in the open market on Friday. However, the inter-bank rate, registered a deprecation of 65 paisa as the dollar traded at Rs141 against Rs140.35 on Thursday.

Currency dealers said the movement is due to disequilibrium in supply and demand of dollar in the market but they blamed the inter-bank for pushing up the open market rates.

Money changers said the selling and buying of dollars is not easy these days due to mounting pressures on Pakistan from the international watch dogs that were not satisfied over government’s measures in a recently concluded visit.

“Strict measures have been taken by the government and the State Bank to control illegal trading of dollar in the country. In fact, doing currency business has become so complicated that buyers are reluctant to purchase the greenback,” said a top currency dealer.

The dollar’s appreciation in the open market can be attributed to the State Bank’s loosening grip on the exchange rate — as part of its policy — to bring the dollar at par with the demands of the International Monetary Fund. The finance minister in an interview hinted that Pakistan is likely to enter in an IMF agreement in April.

Published in Dawn, March 30th, 2019