KARACHI, May 22: The US dollar lost 15 paisa to rupee in the open market on Saturday and executives of exchange companies say it would fall further next week.

Most exchange companies quoted 58.50 as spot selling price of the dollar down from 58.65 on Friday. Heads of these companies said the dollar fell on news that exchange companies would sell a couple of millions of dollars in the market next week. "It was panic-selling by those who had stocked dollars in anticipation that it would keep rising," said an official of a large exchange company.

He said all exchange companies had decided to sell a certain amount of dollars that is linked to their paid-up capitals in the open market next week to prop up the rupee. Heads of exchange companies say their intervention in the open market would bring the dollar down to Rs58.25 if it remains stable around Rs57.75 in the inter-bank market.

In the inter-bank market the dollar closed unchanged at Rs57.75 on Saturday.

Bankers and heads of exchange companies say that a 50 paisa gap between the inter-bank and open market exchange rates does not impact adversely on the inflows of foreign exchange inflows from overseas Pakistanis. A higher spread does. Sources close to the State Bank say the central bank would provide cash dollars to the exchange companies for onward selling in the open market. But they make it clear that it would not be an indirect intervention of the central bank. "We will simply give cash dollars to the exchange companies and get from them the equivalent amount of TTs."

Exchange companies sell non-dollar currencies in Dubai and bring back home their dollar-equivalent through TTs or telegraphic transfers or in cash.

Lately the central bank has refrained exchange companies from brining in cash dollars after selling non-dollar currencies in Dubai. So they have no choice but to bring back home via TTs the dollar-equivalent of whatever amount of non-dollar currencies they sell in Dubai.