ISLAMABAD – The currency dealers have sold $2.4 billion to the banks in thelast year. The dealers said that since September last year, they have soldaround $1 billion extra to banks, increasing the total to $1.4 billion.
While the increase in inflows is likely to surpass the selling target of$3.5 billion for the ongoing fiscal year.
The currency traders believe that the exchange rate may see a big changeonce the country comes out of the grey list in the next review of theFinancial Action Task Force (FATF), accompanied by the slow and gradualappreciation of the rupee against the dollar.
The local currency gained about Re. 0.80 in a month, against the dollarwhich was being sold as low as Rs. 155.20 on Saturday in the open market.In the inter-bank, the dollar was being sold at Rs. 155.40 on Friday.
According to bankers, the decline in the dollar is mainly caused by thefalling demand for the greenback from importers, a banker said:
The inflow of dollars has increased while outflow is low which is visiblein the large decline of current account deficit.
The open market, which follows inter-bank rates, witnessed a 95% fall indollar buying.
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“The buyers have almost disappeared due to many reasons but mostly onaccount of tight monitoring of the foreign currency buyers,” said ForexAssociation of Pakistan President Malik Bostan. He said that the investmentin greenback lost attraction particularly due to high-interest rates whichhave pulled the local currency deposits. Malik Bostan said:
There are only sellers in the currency market. I believe once the countrycomes out from the grey list, the selling would be much higher as manypeople still hold dollars due to looming FATF decision, Kashmir issue, andthe recent political sit-in at Islamabad.
The open market is currently selling $10 million to banks every day. “Wehave sold $1.2 billion from June to Sept, I believe we can sell up to $4billion to banks in FY20” he added.
The amount is significantly higher than the target of $3.5 billion set bycurrency dealers for the ongoing fiscal year.
The current account deficit, which was about $13 billion in the last fiscalyear, is likely to reduce further in the current fiscal year.
