Rupee edges up in open market

KARACHI: Higher inflows of US dollars during the last week of January eased up pressure on the exchange rate as the rupee gained about one per cent against the US dollar in the open market.

“We have been selling dollar at Rs139.50 before the $2 billion inflows which fell to Rs138.20 on Saturday,” said Secretary General of Exchange Companies Association of Pakistan Zafar Paracha.

However, he said with the frequent inflow of dollars, the investment in the US dollars rapidly disappeared and the open market shrank by 70 per cent within a couple of months.

“We have to surrender 80 per cent of dollars to the banks which means there is no buyer for dollars in the open market,” said Malik Bostan, President Forex Association of Pakistan.

He said only sellers are available while small buyers of few hundred dollars are visiting the currency market.

“Large buyers have left investing into the dollars particularly after the restriction of the State Bank to come and buy from the counters of exchange companies,” he said. Earlier, the exchange companies were free to deliver dollars to the buyers at their homes, offices or banks.

The State Bank received $2bn — $1bn each from UAE and Saudi Arabia on Jan 24 and Jan 25, respectively — which strengthened the local currency.

“I believe with the inflow of another $2bn from UAE would further ease pressure on exchange rate and the dollar may shed another Rs1.5 to Rs2,” said Paracha