KARACHI: Resumption of currency trade with Dubai after a gap of three days is likely to improve dollar supply in the open market.

The dollar traded at Rs140.50 in the open market on Feb 27, the day on which the Indian war planes crossed the line of control but started falling from the very next day to trade at Rs139.20 in the open market on Saturday.

Currency dealers said that following air space violation by India, dollar rates increased as demand shot up which was subsequently satiated by the State Bank of Pakistan which started supplying dollars in the market.

“Now there is no shortage of dollars since demand is at its lowest level. The market volume has dropped to $2-3 million compared to $5-6m in normal days’ trading,” said President Forex Association of Pakistan Malik Bostan on Saturday.

Moreover, he added that, “today we have exported foreign currencies to Dubai equal to an amount about $8 to $10m. This amount of dollars would return to our market on Monday which may create surplus in the open market.”

The current trading volume is not more than $3m which means banks would receive the rest of dollars. For the last two months, exchange companies have been surrendering their 50-70 per cent dollars to the banks.

The reserves with the schedule banks have also increased since December 2018 to $6.779 billion indicating an addition of $226m during the period.

Published in Dawn, March 3rd, 2019