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The Pakistani rupee continued its downward march on Wednesday, sliding Rs1.45 against the US dollar in the interbank market.
According to the currency rate list of the Exchange Companies Association of Pakistan, the dollar was changing hands in the interbank market for Rs304.50 at 12pm. It had closed yesterday at Rs303.50, according to State Bank of Pakistan (SBP) data.
In the open market, however, the dollar was trading for much higher — Rs323, similar to yesterday’s rate. However, the ECAP quoted the open market rate at Rs318.
“As if economic mismanagement was not enough, uncertainty on the political side has left traders bereft of trust and confidence,” Analyst Komal Mansoor told Dawn.com. “Most analysts are looking for an emergency meeting this coming week, which could help address the rupee weakness.”
She added that the rupee depreciated almost 10 per cent since this rally began. “If the rupee is allowed to depreciate it will only increase the dollarisation & inflation phenomenon”.
Currency experts have said the dollar rates quoted by the banks and exchange companies are not real.
The banks are reluctant to depict the real situation fearing the central bank’s reaction, while the exchange companies don’t want to tell the truth fearing action taken against them, they had added.
Sources in banks had said that with the opening of imports — a condition of the IMF — the banks feared that poor dollar inflows were not enough to meet the high demand from importers. Under this situation, the currency dealers in banks resist the opening of letters of credit for imports.
The banks are responsible for providing dollars for the opening of L/Cs.
Bankers had dismissed as rumours reports circulating in the financial circle that a huge amount of dollars would land in Pakistan next month and talks with the IMF are in the final stage.
The bankers had said they don’t believe in such speculative reports and would continue to follow the ground reality which demands an extremely cautious approach towards imports and the exchange rate.
“With the induction of the interim government, the situation is going from bad to worse. Within 18 days of this government, the dollar appreciated by Rs14.40 to Rs303.05 from Rs288.65 on Aug 11 in the interbank,” Atif Ahmed, a currency dealer in the interbank market had said.
The open market reported the dollar price at Rs318 on Tuesday, while it was Rs296 on Aug 11 — the day the interim government took charge.
The dollar appreciated by Rs22 per dollar since Aug 11.