KARACHI, May 6: Interplay of demand and supply pushed back the value of dollar below Rs100 on Monday in the money market.

Bankers noted that falling inflation has strengthened the local currency against international currencies like US dollar.

The currency dealers observed that buyers of greenback almost disappeared from the market which has not only hit the trade four month low but appreciated the local currency against the US currency.

Higher local currency demand reflected in few branches of large banks in Karachi. A number of account holders complained that they could not get cash in some of the branches because of non-availability of cash. A large private bank in Pak Colony and an Islamic bank branch in SITE area were out of cash and the people were kept waiting for few hours.

“Nothing extra ordinary happened. The delay in arrival of cash could have a security reason,” said a spokesman of Meezan Bank.

When contacted, exchange companies said the market was dry but they have no indication that banks were short of liquidity.

“The business in Karachi brutally hurt during a month due to series of bombing and strikes. The middle class business community is short of liquidity that reflects the poor dollar trading,” said Anwar Jamal, a currency dealer and expert on currency movements.

The household consumers of the US dollar were out of the market which resulted in to very low business.

“I believe that 70 per cent customers are selling dollars while 30pc were buyers,” He said adding that the situation would prevail till elections results.

Currency dealers said the dollar was traded over Rs100 last week but the new week (Monday) noted a sharp fall in the dollar demand and the prices fell back to Rs99.90.

Currency dealers said the inflow of dollars to support political parties in Pakistan has increased which is also a reason for lesser demand.

However, they said most of the dollars were remitted through banking channels.

“The remittances of overseas Pakistanis will show higher amount during April,” said a banker while endorsing the claim that overseasPakistanis were sending fund for their respective political parties in Pakistan.

Bankers were not sure how much inflows were bound to support for the political parties but said it could be several million dollars.

Currency experts were also of the view that below 6pc inflation has given a confidence to the local currency which has been melting for years with double digit inflation.

The double digit inflation which had touched as high as 25pc and average double digit inflation during the last four years, eroded confidence over local currency and it lost 58pc value against the US dollar during this period.