Saturday, October 11, 2008

The Pakistani currency is facing the horrible devaluation.

The Pakistani currency is facing the horrible devaluation. The Govt has been failed completly in controlling the devaluation of Pak Rupee. The investment outflow continues. The currency dealer and money exchangers are also playing role in outflow of money.

The State Bank of Pakistan has disbursed some 25 million dollars at the notional rate of Rs 80 to the exchange companies aimed at stopping free fall of the rupee. However, no positive impact was witnessed on Friday, as once again the PKR lost 50 paisa against the dollar to close at Rs 80.70 in the open market, Business Recorder has learnt.

Although, on Thursday the central bank intervention had dealt a positive impact on the currency market and the rupee recovered some 25 paisa in the interbank and some 30 paisa in the open currency market. On Friday once again the dollar demand surged in the open currency market as the general public made huge buying of dollar amid strong rumours of banks' defaults. But, the interbank market remained stable due to the slow activity.

Sources said that exchange companies are taking full advantage of the SBP's offer to get dollar at a notional rate of Rs 80 to meet customers' requirements and during the last two days exchange companies acquired some 25 million dollars from the central bank.

"We have acquired some 10 million dollars on Thursday from the central bank, while on Friday about 15 million dollars were also taken to overcome the dollar shortage in the open currency market," said Munaf Kalia, general secretary of Exchange Companies of Pakistan.

He said that the SBP has assured full logistic support to maintain the dollar at a reasonable rate and it is expected that more positive results would be seen in the next few days. He said that the open currency market is still facing huge demand of the dollar, therefore some pressure was witnessed on Friday and the dollar closed at Rs 80.30 with a gain of 10 paisa.

However, market sources said that on Friday the rupee further depreciated, losing 50 paisa against the dollar to close at Rs 80.70 despite the SBP intervention. Sources said that Lahore and Peshawar currency markets see more demand of the dollar and in these markets the dollar was sold at Rs 81 on Friday and if the supply would not improve, it would go up further.

Munaf Kalia said that Lahore and Peshawar markets have huge demand, which would be met with the help of the SBP. He indicated that exchange companies would acquire more dollars on Saturday from the central bank. He requested the general public not to hold dollars, as its price would soon decline and they can suffer huge losses.

11-10-2008

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