US dollar black market goes out of control in Pakistan
Shares
The Pakistani Rupee (PKR) fell further against the US Dollar (USD) and posted losses during intraday trade today.
It depreciated by 0.11 percent and closed at Rs. 224.65 after losing 25 paisas against the greenback. It quoted an intraday low of 225 against the greenback before close.
The local unit was bearish against the greenback and opened trade in the 224 range in the open market. By midday, the greenback moved higher against the rupee. After 1 PM, the local unit was red and stayed on the 224 level against the top foreign currency the interbank close.
The rupee reported losses against the US Dollar sixth day in a row today, with PKR/USD rates touching as high as 250 in the informal/black market. The State Bank of Pakistan’s (SBP) limitations on foreign currency in order to maintain the government’s shrinking reserves have created a shadow market for US dollars in Pakistan.
Money changers are saying the formal market is going through arguably its biggest dollar crunch since Zia ul Haq’s era. Immigrant workers are using the black market as it offers better profits. Remittances are expected to clock in at lower levels with November’s data just around the corner.
Our channel checks are telling us that companies that are facing challenges while getting their transactions cleared by SBP are regularly tapping into the black market. The informal market boom is expected to worsen as analysts cite the February-June 2023 period as a reckoning for dollar hoarders.
Globally, oil prices fell on Monday, intensifying a multi-week decline, as a weakening global economy offset supply issues caused by confusion regarding Russian production cuts.
