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KARACHI: The US dollar plummeted to Rs97-level on Monday, continuing its depreciation from the previous week.
According to forex.pk, the greenback was being bought at Rs97.70 and sold at Rs97.90 in the interbank market.
However, in the open market the dollar was being sold at Rs100.75 and bought at Rs100.20, registering a slight decrease in its value from the previous day.
Last week the dollar dropped to Rs98.10 in the interbank market and currency dealers had predicted further devaluing of the greenback this week. A decline in the prices of petroleum products is also expected as a result of the greenback's depreciation.
The rupee has appreciated by 7pc in the Jan-March 2014 period, becoming one of the best performing currencies in the world so far in this calendar year.
The appreciation came after the currency devalued by around 6pc against the dollar in the first six months of the 2013-2014 financial year.
The appreciation is being linked with an unexpected $1.5bn received under the Pakistan Development Fund (PDF) by a friendly nation.
Whether the current trend is sustainable or not is difficult to answer at this point.
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On DawnNews
Comments (18) Closed
Mar 24, 2014 11:57am
Oh yeah, dollar lost the race with Pakistani rupee.
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Mar 24, 2014 12:09pm
Why there is a lot of difference in the inter bank and open market rates? and still money exchangers are not providing dollars to public and if they provide, they are asking 103 per dollar
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Mar 24, 2014 12:46pm
words of ishaq dar prooved true ....fantastic superb dollar below 98....
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Mar 24, 2014 01:22pm
Good achievement. Dabi Rakh.
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Mar 24, 2014 01:58pm
sharif has said the rupee will stay between 98-100. Not an economist, but it'd be far better if it drops much lower. Our debt is in usd. When dollar drops, petrol gets cheaps, other goods and debt is reduced. PIA can lease or repair for cheaper and so forth. But sharif is pro business so that may not happen. Pak needs stronger rupee than exports. Countries with strong currency export as well..
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Mar 24, 2014 02:59pm
@SYEDA SARA BATOOL:
question you should be asking is" WHO is buying Rupee?
i'd be more interested in if stays there for longer period of time.
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Mar 24, 2014 03:07pm
@SYEDA SARA BATOOL:
we need to see whether it's temporary or it will sustain.
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Mar 24, 2014 03:21pm
@SYEDA SARA BATOOL: What is the point if commodity prices don't fall as well? The price of petrol is still the same, for example, despite the fact that it is now cheaper for Pakistani companies to import and refine oil. That also means that anything where transportation costs are a component of the cost (i.e., foods, etc.), aren't dropping in price accordingly.
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Mar 24, 2014 04:39pm
Wait for a few weeks and see the greenback at 115.
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Mar 24, 2014 04:41pm
Brilliant management, they need to keep it up... frankly speaking despite of the fact I am not from pmln rather supporting PTI but now I can see that these guys are doing well. they are devoted and rest of the world trust on them, it is evident by getting GPS plus, middle east leaders visits, American stance, etc. it would not be fair if we unnecessarily criticse them for good things, let them have time to prove.... PTI need to prove in KPK, PPP in Sindh and then after 5 years make comparison.
Malikpur Janderabri - Abbottabad
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Mar 24, 2014 06:45pm
@uzair abbas:
As an economist, let me inform you of the other side. If the dollar gets cheaper, the price of your exports increase making them less competitive in the world. So something that costs Rs will cost a $1 if the exchange parity is Rs 100/$1. But if the price of the dollar decreases to Rs 90, then the same good would cost $1.11 (if I did my arithmetic correct).
Hence, for a country like Pakistan dependent on both, we have to keep a level parity between the two currencies. Generally, the level doesnt matter in the long run but the volatility and trend matter a lot.
Completely separate from that though, most work has shown the government shouldnt even try to help its currencies because it is an impossible thing to do and should focus on governing rather than being part of capital markets.
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Mar 24, 2014 07:45pm
Oh dear! Poor Sheikh Rasheed.
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Mar 24, 2014 08:34pm
I still think that it is artificial.
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Mar 24, 2014 08:39pm
This is a result of "$1.5bn received under the Pakistan Development Fund (PDF) by a friendly nation." basically borrowed/gifted funds that resulted the rupee to go down. This will not last long, it is all superficial to make the public fool!
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Mar 24, 2014 08:45pm
Anyone stop and ask whether any of sudden rise in the rupee has anything to do with economic progress? I don't see anything substantive that would warrant this rise but I do see a Finance Minister doing everything in his power to support the rupee but when the money runs out (which it will) then what happens?
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Mar 25, 2014 12:53am
Rupee appreciation is good, artificial or not. Every developed and emerging economy manipulates its currency and economic outlook...just look at Spain, Greece and even Japan...
PPP has a track record of spreading corruption and misery...first time they came in 70s, they spread political terror in Punjab by beating opponents, and now economic terror by printing so much money causing inflation and misery for people.
Support anyone except PPP and MQM.
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Mar 25, 2014 02:08am
@Umer :
That's because the government needs to reign in the currency exchange dealers. They manipulate the market as they want. The dollar at 97-99 should be fine. We also don't want to hurt our exporters!
Reigning them in is not an easy task. Huge stakeholders involved. Including the government itself to some extent. Not to mention the role of the undocumented (black) economy.
What the SBP can do is keep reserves as high as they can, in order to control the supply and demand (which determines the price of dollar) of the dollar.
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Mar 26, 2014 02:24pm
By the grace of Allah, and it will be sustainable generating a far positive impact InshAllah
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