Rupee dips to 73 vs dollar, hits new low

[Naveed Yaseen]

KARACHI: The rupee further depreciated by 2.6 per cent on Tuesday to the lowest mark in the inter-bank market as appetite for the US dollar continued to increase amid hectic buying by banks, apparently to fulfill their letter of credit obligations.

In the kerb market, the rupee followed the same trend and slid to a new record. Till the close of the inter-bank market, at ready counters, the dollar was being exchanged at Rs72.80 for buying and Rs72.90 for selling as compared to Rs71.80 and Rs71.89 a day earlier.

In addition, in Tom market, a term used for ‘tomorrow/next’ and refers to simultaneous buying and selling of a currency for delivery on the next day, the value of dollar appreciated to Rs73.65 on buying and Rs73.75 on selling desks. The value of Tom trade usually gives an indication on how the rupee will open the following day.

Amid high demand and in absence of any regulatory intervention in the inter-bank market, the banks were quoting the price of dollar to their clients haphazardly, which sent the dollar off in a spiral that could plainly be termed as a mirror of unbridled kerb market behaviour.

The rupee has fallen 18.3 per cent against the dollar this year as annual inflation has accelerated to a three-decade high above 19 per cent and fiscal and current account deficits have widened, largely due to a soaring oil import bill.

Similarly, in the open market there was wide disparity between rates quoted by different foreign exchange companies, which was confusing for individual investors who intended to change small amounts. One of the examples of this disparity can be gauged as Forex Association of Pakistan quoted buying prices for dollar in kerb market at Rs72.70 and selling at Rs73.05. At the same time Khanani and Kalia and some other leading exchange companies were quoting the buying price at Rs73.40 and selling at Rs73.70.

On the same day, the State Bank of Pakistan (SBP) issued average conversion rates for US dollar at Rs69.59.

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