KARACHI: Despite a slight improvement in its value, the rupee looked shaky against the US dollar on Monday, according to currency dealers in the inter-bank market.
The dollar shed its weight by Rs1.28. The closing price of the greenback, as reported by the State Bank, fell to Rs275.30 from Rs276.58 the previous day.
Currency dealers said there was no solid reason behind the rupee’s improved showing.
The dollar shortage has made trade and industry nervous.
While the government’s financial team is busy negotiating with the IMF, Prime Minister Shehbaz Sharif said at the weekend the lender was giving the government a “tough time”, signalling that more difficulties are in the pipeline for the nation.
“The government is deliberately intensifying political uncertainty by arresting known leaders, a move to make the economic crisis a sideshow to the political crisis,” said a financial analyst. He said the economic situation was more severe than the political crisis.
Most economists and analysts have been warning that the country has little time for concluding talks with the IMF. It was noted that the financial sector seemed to have no option other than going to the IMF.
“The dollar will appreciate again and again; no one can stop it unless an inflow of dollar is managed.” The State Bank has almost exhausted its reserves.
“Three billion dollars is a peanut for a nation of 220 million,” said Atif Ahmed, a currency dealer and expert in inter-bank market.
The exchange companies were not ready to comment on the situation. Instead, they were hopeful that talks with the IMF would succeed and the situation would improve.
The importers are still unable to open Letters of Credit while pending L/Cs are causing losses to importers. Buying dollars from grey market raises the cost of imports, which has a knock-on effect on essential commodities.
Exchange companies quoted the dollar at Rs283, but the market was dry. It’s hard to find dollars in the open market. Banks are not providing cash dollars to exchange companies despite instructions from the State Bank.
Published in Dawn, February 7th, 2023
