Friday, February 3, 2023

Dollar crosses Rs250 in open market after exchange rate cap removed

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KARACHI: The Pakistani rupee depreciated against the US dollar in the interbank and open markets on Wednesday after the Exchange Companies Association of Pakistan (Ecap) removed an unofficial cap on the exchange rate.

According to forex dealers, the USD was being traded at Rs252.50 in the open market at 12pm against yesterday’s close of 240.75.

In the interbank market, the USD was being traded at Rs231.5.

The Exchange Companies Association of Pakistan (ECAP) Tuesday removed the cap on the US dollar in a bid to end ‘artificial’ demand in the market

In a statement, ECAP secretary Zafar Paracha said that the association was withdrawing the cap on the US dollar in the “nation’s interest” as the limit was causing adverse effects.

The statement noted that there was artificial demand in the market as people would buy the dollar from us and sell it in the grey market.

“As a result, the business was shifting from official channels to the grey ones, hurting not only the reserves but also dealing losses to the exchange companies,” Zafar Paracha added.

He further said that once the dollar was allowed to trade at the market value, the customers would automatically shift from the grey market to the legitimate channels.

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