KARACHI: The rupee staged a surprise recovery of Rs7 or 2.3 per cent against the US dollar on Tuesday in the open market.

Currency dealers said this appreciation of the rupee was due to the release of about $5 million of exchange companies pending with the State Bank of Pakistan (SBP).

The dollar was trading at Rs305 before the release of $5m, but it saw a sharp decrease to Rs298 till the closure of the market.

“The central bank has assured that our pending inflows would be released quickly which means the open market would have enough liquidity,” Malik Bostan, chairman of the Exchange Companies Association of Pakistan (ECAP), said.

He insisted that the open market had no shortage of dollars.

Just a day before, the exchange companies were quoting the rate up to Rs305 but there was little chance to find dollars from exchange companies.

The sudden fall in the dollar rate would not only affect the grey market rates but would also pull back the dollar hoarders to sell their holdings before it’s too late, he said.

The general public was not selling their foreign currencies due to uncertainty on economic fronts, particularly the external front.

The $5m injected by the State Bank of Pakistan would change the open market scenario, said a currency dealer.

Published in Dawn, June 14th, 2023