Dollar quoted at Rs 84 on open market

[Naveed Yaseen]

By Mushfiq Ahmad
KARACHI: Dollar was selling at Rs 84 in the open currency market on Wednesday evening after it touched Rs 80.80 level in the interbank market.

Different exchange companies were demanding different rates for selling the US currency. An official of an exchange company said they were buying dollar at Rs 82.50 and selling at Rs 84. A dealer at another exchange company said they were buying dollar at Rs 82 and were not selling.

A leading moneychanger said the exchange companies are not being provided their dollars by the commercial banks because they don’t have cash. Besides, the State Bank, which had been providing dollars to the open market, has now stopped supply, he said.

He said the central bank should try to stabilise the dollar at Rs 78 level. Beyond this level, he said, the rupee dollar parity would remain instable.

Malik Bostan, a leading moneychanger, told Daily Times that dollar had risen in the open currency market because it had gained about 170 paisas in the interbank market during the last two days.

Demand for dollar in the open currency market has risen to $20 to $25 million ever since reports about chances of Pakistan’s defaulting on its external payments emerged. Previously, the demand for dollar in the kerb market used to be around $10 million.

“People are panicked,” said an exchange company owner. “Rupee account holders are drawing their money from banks and investing in dollars because the domestic currency keeps losing its worth. Also, those who have their accounts maintained in dollars are getting their money out of banks and buying dollars from open market to keep cash dollars with them. They fear the government would freeze foreign currency accounts.”

He said the situation would improve only if the government managed to get loans from friendly governments. Earlier in the day, the dollar closed at Rs 80.70 and Rs 80.80 in the interbank market. The State Bank intervened in the market but failed to boost rupee. A treasurer at a leading bank said the central bank injected between $30 million and $40 million. “The dollars available in the interbank market are insufficient to meet the customers’ demand,” he said.

http://www.dailytimes.com.pk/default.asp...2008_pg5_1