KARACHI, Feb 22: The US dollar that remained on the slide for three consecutive weeks in the open currency market made a modest recovery this week on the back of renewed buying by speculators.

The greenback closed at Rs59.75/Rs59.85 for spot buying and selling on Thursday the last working day of this week up five paisa from last week’s close of Rs59.70/Rs59.80. Money changers said the slide of the dollar came to a halt as some speculators entered the market convinced that the hard currency would lose no more value in kerb.

“Enough is enough. The dollar is not going to shed more weight in kerb,” said one of the leading money changers who is also on the list of those from whom the State Bank normally buys dollars.

His view is in sharp contrast to what Finance Minister Shaukat Aziz says. The minister is on record saying that the State Bank is deliberately keeping the dollar from falling to new lows so as to save exporters from booking exchange losses. That implies that the real worth of the dollar is much lesser than what it is now.

The fact that the central bank has been constantly purchasing dollars from the inter-bank market lends credence to his optimism about rupee’s health. The exchange rate movement in the inter- bank market also support the theory that the SBP is keeping the dollar stable. Not only the dollar has remained pegged around Rs60.10/Rs60.20 for most of the time in the inter-bank market this week but on Thursday it even declined to Rs60.07/Rs60.12.

But what on earth has made speculators believe that the dollar is going to rise or at least it is not going to fall further in kerb market. “The dollar kept falling in the kerb during past few weeks primarily due to improved perception about the country’s economic performance and also because of the Eid-ul-Azha season,” said a money changer.

When Eid-ul-Azha approaches many investors need rupee liquidity to buy sacrificial animals and spend on other things. Those who hold dollars as a source of investment also offload the same. And overseas Pakistanis send higher remittances back home than in other months for the same consideration. All this put together pushes the dollar down.

When money changers will reopen their businesses on Monday it will be the third day of the Eid and there will be no more dollar selling either by hoarders or by those overseas Pakistanis who are back home to celebrate Eid. “Then you will see the dollar rate a bit stable,” said a money changer with offices in Karachi and Dubai.

Whereas money changers foresee better times for the dollar in near future bankers say they are watching the exchange rate movement cautiously.

“It is difficult to say in what direction the exchange rates would move in coming weeks,” said treasurer of a foreign bank. “Since the SBP has been supporting the greenback at Rs60 or so people rightly think that the dollar is weaker than it looks.”

Bankers say as the SBP has lifted restrictions on various avenues of outflow of foreign exchange and as the opening up of investment opportunities in Afghanistan is due to increase imports there are chances that the demand of dollar may rise slightly in coming weeks. But on the other hand home remittances are showing rising trend and the debt servicing due for this quarter is going to be much lesser than in the past due to debt rescheduling that Pakistan has got recently. “Keeping that in view it is difficult to say that the dollar would make a really impressive rebound in near future,” said treasurer of a large state-run bank.