Karachi September 8 2022: Pakistan Rupee depreciates in interbank for the fifth consecutive day to trade near 226 against dollar as demand for imports of food items increases due to floods amid compulsory declaration of dollars for inbound travelers and strengthening of dollar in international market.
Pakistan Rupee depreciates 2.52 in interbank to trade at 225.92 against the dollar at PST 11:00. In open market dollar is up 60 paisa to trade at 234.6 at PST 11:00.
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.
As the import of vegetable increases the gap between Interbank and Open Market exchange rates widen to unprecedented levels for Rupee against the Dollar in forex market.
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
“Credit cards and imports of onions and tomatoes from Iran and Afghanistan increased demand for dollars” says Malik Bostan President Forex Association of Pakistan.
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 dollar hovered near a two-decade high hit in the previous session on Thursday as investors looked for fresh insight on the global monetary tightening path from a European Central Bank rate decision and comments from the head of the Federal Reserve. The U.S. dollar index, which measures the currency against six major counterparts, edged up 0.04% to 109.73, after hitting a peak at 110.79 on Wednesday, a level not seen since June 2002, reported by Reuters.
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