KARACHI, June 12: Exchange rate settled at the depreciated value of rupee despite significant fall of dollar demand, said currency dealers on Tuesday.

The recent sharp appreciation of dollar against the local currency seems to have strong hold in the exchange rate as rupee failed to gain against the greenback despite low demand.

The recent trend of rupee devaluation set new records while the local currency lost 3.5 per cent against the dollar in the last 20 days.

“There was no panic or hurry for the US dollar but the rate remained stable leaving no hope for gain by the local currency in future,” said Atif Ahmed, currency dealer in the inter-bank market.

Earlier, the inter-bank market had been reflecting that the dollar got appreciation due to very high demand, particularly for large payments like debt repayment to IMF and oil imports.

However, the payment to IMF was made and the currency dealers said large payments for oil imports were also completed which significantly reduced the dollar demand. Despite low demand, the market was not ready to sell dollar at a lower price.

On Tuesday, during the day time dollar was traded for Rs94.20-30 but at the end of the market, a large bank started buying massively which again escalated the dollar price to Rs94.42-46.

“It seems that with slight fluctuations the devalued exchange rate has been established and I don’t hope for rupee to gain against the US dollar,” said Atif.One of the major reasons the currency dealers have given for appreciation of the US currency is the strength it gained against all major world currencies.

The recent financial turmoil in Europe which weakened the second biggest currency, euro, provided additional strength to US dollar.

Investors found the dollar as a safe heaven as they withdrew their major investments from euro.

At the same time, the falling oil prices also resulted into disinvestment from this sector which joined dollar giving more strength to the green back.

“This is not the local scenario that dollar is gaining against rupee but the US currency becomes very strong after weakening of euro,” said Malik Bostan, President, Exchange Companies Association of Pakistan (ECAP).

He led a delegation to see President Asif Ali Zardari in Karachi on Monday and discussed this situation and assured the President that exchange companies would do their best to improve the situation by increasing remittances.

He said the exchange companies bring $4 billion remittances each year while the same amount is sold in the open market which reduces pressure on banks for US dollar.

He was hopeful that rupee may gain if inflows from abroad improve.