KARACHI: Intervention of the State Bank of Pakistan (SBP) in interbank and open market has helped the domestic currency regain ground versus greenback, treasures and currency dealers have revealed.
Currency dealers said that central bank had restricted money changers from intercity cash transfer and asked them to coordinate with commercial banks for their businesses.
Moreover, the Chinese government’s intention to provide $2 billion to Pakistan government has also provided strength to value of domestic unit against dollar in the backdrop of the incoming government for a smooth transfer of power and keep democratic process smooth.
In open market, buying and selling was recorded at Rs 123 and Rs 125.50, respectively that kept the value of rupee firm and eased pressure on demand of dollar, treasurers maintained.
The rupee recovered Rs 2.85 to close at Rs 125.02 to a dollar in interbank foreign exchange market from last Friday’s close of Rs 127.80 in interbank foreign exchange market.
However, currency exchange market also witnessed accelerated intraday activity as on a juncture, dollar eased to Rs 122.50. It also created panic like situation during intraday trade that disturbed online trading system of major banks also.
On the other hand, currency dealers said investors started selling dollar that eased supply and demand pressure of US currency in money market after the fall in the value of dollar against the domestic unit.
Currency dealers and private currency companies became cash-starved and were unable to buy dollars after restricting from intercity cash transfer by the central bank.
“If the incoming government approaches the big five of Pakistan bourse and ask overseas Pakistanis to contribute more than their yearly average remittances to the country, it can become at ease to some extent in a short-term period,” said Fazal Ahmed, a financial and currency expert in Houston.
Published in Daily Times, July 31st 2018.