The US dollar maintained its upward trajectory against the rupee in the open-market, and hit the 326 level during trading.
On Thursday, dealers Business Recorder reached out to said the rupee was being quoted at 326 for selling and 323 for buying purposes for customers in the open-market, up from Tuesday’s levels of 325 and 322.
The Exchange Companies Association of Pakistan (ECAP), however, quoted rates at Rs323 and Rs 320 by the end of trading on Thursday.
The currency also remained under pressure against the greenback in the inter-bank market, and closed at 305.54.
The rupee has remained under stress since the caretaker government took over after the departure of the Shehbaz Sharif-led coalition government just weeks ago.
Talking to Business Recorder, Sana Tawfik, analyst at Arif Habib Limited (AHL), identified a number of factors leading to the renewed depreciation run of the local currency.
“Removal of import restrictions has created pressure of import payments, which was reflected in last month’s current account deficit figures,” she said.
“Secondly, the International Monetary Fund (IMF) condition to maintain a currency gap of around 1.25% between the inter-bank and open-market is driving up rates in the latter, with elements of informal market playing its part as well.
“This is also keeping rates in both markets under pressure,” she added.
The gap between rates in the inter-bank and open markets is required to be less than 1.25% under one of the structural benchmarks set by the IMF.
However, the expert noted that the IMF premium is widening for the last few sessions. “The lender needs to reconsider the premium condition, which is having repercussions in form of rupee freefall,” she said.
Tawfik expressed concern that remittance inflows, critical for the cash-starved economy, will also be at the lower end, as the widening gap is pushing people towards informal channels.
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