The decision of the exchange companies to free the dollar and leave it to market forces led to a sudden rise in the dollar’s value.
The US currency soared higher in both currency markets. The dollar made a long jump in the open market, and the value of the dollar increased by Rs 12 to Rs 242.52. The dollar value increased by 24.39 rupees to 255.28 rupees in the interbank market. Due to the lack of supply of dollars in the market, it was already likely that the dollar open rates would go above the Rs 250 level.
Due to the foreign exchange crisis, the rupee has been under constant pressure against the dollar since July. To control this, the exchange companies automatically froze the dollar’s value. They continued to increase the dollar’s value, but due to this cap, a gray market was created where dollars were available in abundance. Still, the dollar price in this market was 15 to 20 rupees higher than in the open market.
Not only the demanders of dollars but also the sellers had turned to the same gray market to get higher prices which affected the activities of the open currency market where the demand from the demanders of dollars was visible, but the sellers in the open market were not turning. In this situation, the exchange companies adopted the free-market mechanism policy by freeing the dollar’s value in the open market last night. Sources say that the open rate is likely to increase gradually due to a lack of supply of dollars in the open market.
In this regard, the Chairman of the Exchange Companies Association of Pakistan, Malik Bustan, told them that due to the non-availability of dollars, the exchange companies had kept the dollar’s value free. He said that we do not have a supply of dollars, so we are not in a position to stop the flight of dollars in the open market. He said that the State Bank should provide 20% of the remittances from exchange companies, which is currently suspended. Similarly, commercial banks should also provide the imported dollars against the various currencies exported by the exchange companies. He added that in the open currency market, there are only buyers of dollars while sellers are absent.
