Dar’s ‘dollar dream’ comes true

Published March 13, 2014
- File Photo
- File Photo

KARACHI: The government succeeded in bringing back the dollar to Rs98 on Wednesday, leaving no doubt that the high inflows were the real force behind greenback’s devaluation.

The dollar dipped below Rs98 in both inter-bank and open markets and was traded as low as Rs97.20-40 and Rs97.60, respectively. However, the rate closed at Rs98.00-20 in the inter-bank and Rs98.30-50 in the kerb market.

Few believed when Finance Minister Ishaq Dar insisted that the US currency would fall back to 98 against the rupee. He, however, proved correct on Wednesday.

Addressing a press conference yesterday, the minister said he was confident that the economy would recover after the rupee breached the psychological 100- mark against the dollar. Bankers said the inflows of the US currency are still high as exporters are eager to sell their dollars in the earliest moment.

“The exporters were not selling their export proceeds for last three months but the sudden fall pushed them to hurry before it’s too late,” said Atif Ahmed, a currency dealer in the inter-bank market.

Bankers had no estimate about the volume of pending export proceeds, but they said average monthly export proceeds are not less than $1.5 billion which means the total pending proceeds could be more than $4bn.

Mr Ahmed said the dollar would fall further if the export proceeds continue to rush in the inter-bank market. “Only government’s intervention can stop this dollar devaluation,” he said.

The dollar has lost about 10 per cent against the local currency during the last three months. The greenback peaked at Rs108.60 on Dec 5, 2013 and is now being traded at Rs98. The rupee gained more in the open market as it was Rs110 on the same date and now it is slightly over Rs98.

“Pressure is mounting on the government, particularly by the exporters, to stop dollar devaluation,” said Anwar Jamal, a leading currency dealer in the open market.

However, exporters were not in panic except those who had dollars in stock before the currency started to fall.

“We will add cost to the product as per the value of dollar,” said Aamir Aziz, an exporter of textile-based finished products. However, he said the impact of sustainable low dollar price will ultimately benefit the exporters who use one-third imported material for exports.

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Who bears the cost?

Who bears the cost?

This small window of low inflation should compel a rethink of how the authorities and employers understand the average household’s

Editorial

Internet restrictions
Updated 23 Dec, 2024

Internet restrictions

Notion that Pakistan enjoys unprecedented freedom of expression difficult to reconcile with the reality of restrictions.
Bangladesh reset
23 Dec, 2024

Bangladesh reset

THE vibes were positive during Prime Minister Shehbaz Sharif’s recent meeting with Bangladesh interim leader Dr...
Leaving home
23 Dec, 2024

Leaving home

FROM asylum seekers to economic migrants, the continuing exodus from Pakistan shows mass disillusionment with the...
Military convictions
Updated 22 Dec, 2024

Military convictions

Pakistan’s democracy, still finding its feet, cannot afford such compromises on core democratic values.
Need for talks
22 Dec, 2024

Need for talks

FOR a long time now, the country has been in the grip of relentless political uncertainty, featuring the...
Vulnerable vaccinators
22 Dec, 2024

Vulnerable vaccinators

THE campaign to eradicate polio from Pakistan cannot succeed unless the safety of vaccinators and security personnel...