KARACHI: The Pakistani rupee hit 18-month high on Tuesday against the dollar, trading below the 96-to-a-dollar level.
Dollar further plunged to Rs95.70 in interbank during the day, witnessing Rs.50 decease. Foreign currency dealers said that the rupee maintained its upward journey for the second consecutive day both in the interbank and open market.
Last time rupee underwent such a drastic appreciation was following the 9/11 attacks when it gained 6.2% against the dollar in Sept-Dec 2001.
But the rupee lost a whopping 9 percent versus the greenback in the first six months of the current fiscal year.
“Dollar inflows in the market are more than the expectations of the market participants,” said Mohammad Sohail, Chief Executive of Topline Securities, referring to $750 million inflow under the Pakistan Development Fund.
On the other hand, renowned economist Dr Salman Shah also seems to support this line of reasoning. “Forex markets operate on demand and supply; the excessive quantity of US currency in the market is what seems to be pushing the exporters to sell off their own dollars and convincing others to shift investments from other sources to dollars.”
“If remittances continue rising, exports increase because of the grant of GSP Plus status, imports drop and the recent memoranda of understanding signed with different countries translate into investment, the exchange rate will maintain this trend,” said Shah and added, “Otherwise the rupee will lose ground against the dollar again.”
Over couple of months back, Finance Minister Ishaq Dar had said in a statement that the government would bring back the rupee below 100-to-a-dollar level.
It may be pointed out that marking the strongest appreciation of last few months, the rupee gained as much as 13% against the dollar since November 28 when the rupee-dollar parity in the interbank market stood at Rs107.80. Due to dramatic appreciation in rupee value, bill of imported goods would be lowered down considerably. Similarly, bill of oil import, accounting for roughly 40% of total imports, would also be reduced. Hence, around 13% rise in the value of rupee against the dollar should result in decrease of Rs15 per litre in the price of petrol and diesel. Similarly prices of electricity and gas should also be reduced at the same ratio.
Due to wonderful appreciation in rupee value in recent weeks, Customs Today on behalf of general public appeals to the honourable Prime Minister Nawaz Sharif to reduce the price of petroleum products, electricity and gas to provide relief to the masses as decrease in petrol and diesel prices would bring about tangible reduction in transportation charges, resulting in lowering of prices of essentials including food stuffs and vegetables. Reduction in the prices will also lower down the financial burden on exporters.
