Dollar swirls higher in open market

KARACHI: With the elections just a day away, foreign currency trade is being impacted as the dollar is being sold Rs4-5 higher in the kerb market than the rates set by currency exchange companies.

The dollar was being traded at around Rs130.80 in the kerb market on Monday according to A category exchange companies, reported Dawn.

The buying rate on Monday was Rs130.30. But this didn’t portray the actual situation of the market as various currency exchange companies refused to sell dollar and when they did it hovered around Rs132-135 a dollar.

According to currency dealers, 25 percent were sellers and 75 percent buyers, which interrupted the balance of inflows and outflows. They added exchange rate fluctuations would settle after conclusion of the elections, but there is no chance of dollar return to its pre-devaluation position after shedding 20 percent in last seven months.

Also, the 20 percent appreciation of the dollar has made Hajj expensive for Pakistani’s. The commercial banks or the State Bank of Pakistan (SBP) aren’t bound to ensure provision of dollars to people leaving for Hajj, so they buy US dollars and Saudi Riyals from the open market.

Furthermore, the Saudi Riyal has shot up to Rs34-34.50 from Rs30 a few months ago. This rate being provided by the currency exchange companies isn’t accurate, as the real rate is higher because of shortage of Saudi Riyals in the market.

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