The Pakistani rupee is facing a continuous decline, with its value against the US dollar decreasing by Rs1.4 in the interbank market. The State Bank of Pakistan reports that the dollar closed at Rs304.45.
However, in the open market, the dollar is trading at a much higher rate of Rs319.5, as stated by the Exchange Companies Association of Pakistan.
Currency experts have raised concerns about the accuracy of the rates reported by banks and exchange companies, suggesting that they are not reflective of the real situation. Banks may be hesitant to reveal the true state of affairs due to the potential reaction from the central bank, while exchange companies may also fear repercussions for sharing the truth.
The decline of the Pakistani rupee has been attributed to the increased dollarisation and inflation. The rupee has depreciated by almost 10% during this period.
Sources within banks suggest that the opening of imports, which is a condition imposed by the International Monetary Fund (IMF), has caused a high demand for dollars by importers. Some currency dealers within banks are resisting the opening of letters of credit for imports due to concerns about the availability of sufficient dollars to meet the demand.
Bankers have dismissed rumours about a substantial amount of dollars arriving in Pakistan next month and the finalisation of talks with the IMF. They insist on adhering to the ground reality and approaching imports and exchange rates with caution.
The interim government’s introduction has worsened the situation, as the rupee has increased in value against the dollar by Rs14.40 within just 18 days of the government taking office. This volatility has resulted in a challenging environment for currency dealers in the interbank market.
Additional reporting by Shahid Iqbal