Exchange companies said dollar was not available in the open currency market with traders stating that it was traded at Rs 148 to Rs 155 on the open currency market. Currency dealers told Business Recorder that no dollars are available in the local market, but that they are ready to purchase a dollar for up to Rs 155. A survey of Blue Area market revealed that almost all currency dealers denied they had any dollars to sell.
An official on condition of anonymity said immediate impact of fall in the value of rupee would be on the debt stock, inflation and increase in input cost of raw material for export sector and further increase in trade deficit. He said that one rupee depreciation against the dollar adds Rs 105 billion to the debt. Additionally, he said that the cost of debt servicing would increase thereby choking off other expenditure items, social programmes as well as development expenditure.
The spillover effect of the rupee losing its value on the economy are very serious as it would raise the cost of imports, particularly essential fuels, and raw material used by exporters. He added that electricity tariffs would rise as a large share of total generation relies on imported fuel which would impact more on the poor relative to the well to do. Thus, he said if it was a considered decision to allow the US dollar to gain against the rupee, it was not the wise decision for the economy.
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