KARACHI: The State Bank of Pakistan (SBP) summoned currency dealers after the dollar touched an intraday high of Rs144, eventually closing at Rs 142.7 in the open market.

Noting the speedy rise in the price of dollar, the SBP on Monday invited exchange companies to cool down the rapid increase.

“The State Bank told us not to charge more than one per cent over the interbank rate; we are already within that range,” said Forex Association of Pakistan President Malik Bostan, who was part of the meeting.

According to major currency dealers, the greenback traded as high as Rs143 in the open market before slipping back to Rs142.70 at the day’s close.

However, apart from some big dealers, the dollar shot up to Rs144. “I bought dollar at Rs144 from a currency dealer after surveying the market for a lower rate,” said Abid Ali, who had to remit money abroad. According to him, most of the money changers said they don’t have any dollars while few were offering to buy instead.

Throughout the day, the dollar was not available as currency dealers were buying at Rs143.20 and more were offered indicating the shortage of dollar in the market.

Meanwhile, bankers traded the greenback at Rs140.90, witnessing a 10-paisa increase, and denied that the currency touched Rs141 in the interbank market.

“The SBP adopted a soft stance towards exchange rate, allowing the dollar to gain against the local currency but there was no major change as we closed at Rs140.90 on Monday, from Rs140.90 on Friday,” said a senior banker dealing in the currency market.

On the other hand, exchange companies claimed interbank rate of Rs141 and open market rate of Rs143. The currency dealers said they report average rates, with dollar prices taken from across the country.

Malik said demand was not as high as it was on Saturday, the last working day for open market. According to him, the amount of forward booking was $3 million on Saturday as compared to $1m on Monday. Small currency dealers book dollars in advance from major suppliers.

“This decline indicates there is not much demand for the greenback in market,” he said. Last week currency dealers said that due to massive buying of Saudi riyals for Umrah and Hajj, surplus riyals were not available in order to be exported to Dubai and bring back equal amount of dollars in the country.

Published in Dawn, April 2nd, 2019