KARACHI, July 4, 2023: The Pakistani rupee made huge gains and was up by Rs9.99 against the US dollar in early interbank trading on Tuesday – the first business day for the banks after Pakistan secured $3 billion deal with the International Monetary Fund (IMF).
As this report was being filed, the dollar exchange rate was recorded at Rs275.50 against the previous close of Rs285.99.
The development comes as the dollar continued losing ground against the rupee in open market as well with another Rs4 decline and was traded for Rs280. However, Finance Minister Ishaq Dar had claimed on Monday that the greenback traded within a range of Rs270-Rs272.
As far other top currencies are concerned, the euro was traded for Rs305 after a Rs8 decline in open market on Tuesday while the UK’s pound sterling also slipped by Rs13.
Similarly, the UAE dirham tumbled by Rs6.30 to Rs71.72 and the Saudi riyal by Rs3.70 to Rs71.70.
It is the fear that the rupee will make significant gains that has made people start dumping the stocked dollars in the market to ensure maximum profit after they caused greenback shortage in the country by resorting to hoarding.
On Monday, the Pakistan Stock Exchange witnessed a huge surge as the benchmark KSE-100 Index gained 2,446 points. At close, the KSE-100 settled at 43,899 level.
According to a currency expert, the approval of the stand-by agreement with the IMF was the main reason for the decline in the dollar in the domestic market.
According to Reuters, the shortage of cash rupee owing to bank holidays provided an opportunity to several money changers to buy the dollar on their own available rates, which was in the range of Rs275 to Rs285 on Monday.
The first day trading of the open market after Pakistan’s Standby Agreement (SBA) with IMF for $3 billion created sense of economic stability with better price of the rupee. Due to bank holidays, only a few exchange companies had cash rupees, and even that was limited. Most of the companies were unable to buy dollars despite the rush for sale.
Exchange companies said that there were only sellers; no buyers for dollars were available. In fact, the open market has lost most of its business with banks due to the State Bank of Pakistan’s decision, which allows banks to purchase dollars from the banking market instead of exchange companies.