Karachi: Pakistan rupee remained under pressure throughout the day on Monday in the interbank market owing to rising imports orders and the forward buying pressure.
On Monday, the rupee closed at 161.05 in the official interbank rate and 161 on the open market.
“Local currency will remain under pressure throughout this week as there are a number of import orders and the buyers are opening Letter of Credit (LCs) with the local banks,” said a banker on a request of anonymity. “The importers who have sold their dollars in the interbank owing its depreciation since last September also started forward buying,” he further claimed.
He was of the opinion that earlier the importers were selling their dollar held in their bank accounts, but after allowing the imports of 152 items with low custom duties and taxes, the importers have commenced buying dollars through LCs and forward bookings, he claimed.
According to the reports, the Tariff Policy Board (TPB) removed additional custom duties on 152 tariff lines this month to provide cheap raw materials to the industrial sector including Textile. The ministry is also making its efforts to reduce cost of doing business in Pakistan.
The market experts, however, claimed that the dollar may touch Rs 162 to Rs 163 in the coming weeks if the demand of dollar from the importers is not reduced. Since, last Thursday, the rupee is moving around Rs 160.90 for buying and Rs 161.20 for selling in the interbank market after rising import demands of 152 items.
The dollar is trading around Rs 161.00 for buying and Rs 161.30 in the interbank today.
There was a huge demand from the importers of luxuries items including auto parts and textiles as the federal government has removed the additional Custom Duties on around 152 items this month. The imports of these items were on halt for the last few months as the importers were waiting for removal of Custom Duties on raw-material imports and other luxury items including auto parts etc.
Malik Bostan, head of Pakistan Forex Association said, “there is no demand of the US dollar in the open currency market, but the inflows of the dollar are slow for the last week. He said the money changers are receiving inflows of $4-$5 million daily, but we are also selling these dollars to the interbank market as there is no counter demand on our desk.”
He further informed that there is a panic of lockdown in the exchange companies because of the COVID-19 in Pakistan. The exchange companies are also facing low demand from the Umrah pilgrims who are not buying dollars as they are avoiding to travel to Saudi Arabia because of the tough conditions of quarantine and enhanced Umrah packages.
He further said if the dollar reversed in the interbank, the open market will follow it and dollar will come down soon.
In the last four trading days, the dollar gained Rs 3 in the interbank market. In the open currency market, the dollar gained Rs 2.70 closing at Rs 160.80 for buying and Rs 161.10 for selling, the Pakistan Forex Association data said.