But that did not have a substantial effect on the local currency as the investors remain wary due to a surge in terrorism and the decline in State Bank of Pakistan-held foreign exchange reserves – which now stand at just $3.08 billion and will provide an import cover of 18.5 days. ECAP General Secretary Zafar Paracha said when the dollar cap was removed, it was estimated that the rupee would hit 270 and rebound, however, circumstances changed. “Our reserves are at their lowest in nine years and terrorism – which isn’t restricted to Peshawar – is also surging,” he said, explaining the reason behind investors’ lack of confidence in the government. The ECAP general secretary added that the ongoing political turmoil was also adding to the country’s woes as opponents are being arrested every other day and being put behind bars. Paracha added that the black market gap has been met to a certain extent, but since the government has not opened the letters of credit (LCs) for importers, it will persist. “The government has asked the importers to arrange dollars on their own […] this is why the black market is still active. If this does not stop, the gap might even increase,” he warned, urging the authorities to move towards import rationalisation. Paracha added that amid the terror threat and other underlying reasons, the exports have not released their payments yet, resulting in the scarcity of dollars in the market.
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