Karachi September 12 2022: Pakistan Rupee depreciates in interbank for the seventh consecutive day to trade near 230 against dollar as foreign currencies shortages hit exchange companies counters on FBR decision to declare dollars on inbound flights and higher demand for import of vegetables due to torrential rains and floods.
Pakistan’s Finance Minister Miftah Ismail has stated while speaking to business community that there is still much pressure on the dollar which will not allow us for opening of LCs for imports.
Pakistan Rupee depreciates 1.27 or 0.6 percent in interbank to trade at 229.45 against the dollar at PST 10:45. In open market dollar is trading at 234 at PST 10:25, according to Forex Association of Pakistan.
On August 16 2022, CAA order required all incoming international flights to ensure that all passengers disclose their foreign currency possessions through a pro forma and that airlines submit all these declarations to the CAA. State Bank of Pakistan Deputy Governor Dr Inayat Hussain said before the senate that this was one of the reasons for recent pressure on the rupee.
“A large part of foreign currency supplies is going to the black market as illegal currency dealers as smuggler of goods have become active again across the border with Afghanistan and Iran” says Zafar Paracha General Secretary of Exchange Companies Association of Pakistan in an interview to local newspaper.
“Hawala/ Hundi operators are paying Rs240 for each US dollar in Karachi, Rs245 in Peshawar and Rs248 in Afghanistan,” he said.
Recent floods have brought unprecedented crop damage. As a result, the prices of onion and tomatoes have sky-rocketed in the local markets. In order to alleviate the sufferings of the people due to abnormal price hike, the Prime Minister of Pakistan ordered urgent relief measures to ensure an uninterrupted supply of onion and tomatoe in the local markets. Elimination of all taxes and duties in procuring the two vegetables by import will help reduce their prices.
To control exchange rate in Open Market SBP has decided that effective September 7, 2022, Exchange Companies shall seek prior approval from SBP for such export of USD currency notes and the Intended date should not be beyond two days from the date of request submission.
The greenback idled not far from a two-week low against a basket of peers ahead of key U.S. inflation data this week that might give the Federal Reserve room to slow the pace of rate hikes at its Sept. 21 policy meeting. The dollar index , which measures the currency against six major counterparts, was little changed at 108.78, holding close to those levels after falling back from a two-decade peak of 110.79 reached on Wednesday. It dipped to the lowest since Aug. 30 at 108.35 in the previous session, reported by Reuters.