Karachi: The US dollar rose to as high as Rs103.35 in the open market on Thursday, as buying from the families planning to spend their summer vacations abroad picked up pace.
It was the highest price in the recent wave of dollar’s appreciation against the rupee. Currency dealers believed that the dollar buying changed the balance of the market as they had been selling the US currency mostly and receiving low volume of dollars from the customers for conversion into local currency.
“Thousands of families visit the US, Europe and the Far East each year during the summer vacations which requires millions of dollars. This temporarily shakes up the currency market,” said Anwar Jamal, a currency dealer in the open market.
He said 60 per cent people are buying dollars while 40pc are selling their holdings in the market these days.
This imbalance is increasing the currency’s value in the open market while the inter-bank market was also supporting the price since the dollar has crossed Rs102 in the banks’ market after a long time.
Another reason behind the dollar’s rise was Hajj and Umrah season, said Forex Association of Pakistan President Malik Bostan.
He said at least 350,000 people would perform Hajj this year and they have already started buying dollars on fears that the currency would be costlier in the remaining three months.
People have been buying dollars as well as Saudi riyals, he said.
Currency dealers said that the recent waves of terrorism also had an impact on the dollar’s rising demand. “People start buying dollars or stop selling their holdings when there is panic,” said Bostan.
Though the inter-bank market has been showing stability in the exchange rate, the dollar slowly moved up and crossed Rs102 twice this week.
Experts say that despite high foreign exchange reserves, the dollar appreciated in the banking market which was not surprising, but it explains that the local currency is overvalued against the greenback.
The exporters have been exerting pressure on the economic managers to devalue the local currency to boost the declining exports. This strategy, however, has failed in the past and never paid off.
Exporters said that the Ministry of Commerce has asked the government to devalue the local currency by at least 5pc to get better results.
