Dollar rate decreased further by Rs 2 in the interbank market, after reaching a record low of Rs. 122.4 yesterday.
The dollar rate in Pakistan is trading at PKR 122.80 (buying), and PKR 123 (selling).
As the market opened, there was a negative trend witnessed at Pakistan Stock Exchange. The benchmark KSE-100 index lost 400 points to reach 43,170 points.
Director Research at Arif Habib Limited Samiullah Tariq commented, “The State Bank of Pakistan has taken steps to curb the illegal outflow of dollars. The government, on the other hand, has also imposed restrictions on imports, which has improved the supply of the foreign currency in the market.”
Mr. Samiullah Tariq further witnessed that State bank’s reported purchase of dollars from the market at lower prices is the main reason of decline of the rate of greenback dollar in the interbank market.
Experts like IGI Head of Research Saad Khan is of the opinion that the decline in dollar price is a temporary move that is driven from irregularities created in the market.
He further said that, open market dollar rate is slightly higher than that in the interbank market, which has created this temporary situation. Liquidity problem is there because of buying low and selling high in the open market.
The IGI analyst Mr. Khan believes that change in the government along with a loan commitment of $6-7bn from Saudi Arabia and Asian Development Bank has a vital role in the decline in dollar price.
He also said, “China too, has promised to support Pakistan. It adds to the positive wave that has surrounded investors but the current account deficit and real exchange rate don’t allow any rupee appreciation for the time being. We expect the dollar rate to go back to Rs125-126 levels.
Mr. Khan also made it clear that there is no role of State bank in the decrease in dollar prices in interbank market. “If the central bank does not have any money, its ability to manage the market automatically gets restricted,” the analyst noted.
SBP has made strong guidelines for importers that make it compulsory for them to show their CNICs on any transactions of $ 500 or above through exchange companies, but that is all it can do. The State bank, right now, does not wield the power to influence the market.
First time in four years, the US dollar rate declined by Rs5.36 against the Pakistani rupee in the interbank market on Monday, falling to Rs 122.5 and closing at Rs125.4.