Open-market: rupee slips lower against US dollar

The Pakistani rupee weakened marginally against the US dollar in the open market on Wednesday.

Currency dealers Business Recorder reached out to said the rupee was quoted at 296.9 for selling and 294 for buying purposes for customers in the open market, lower by nearly Re1 as compared to rates on Tuesday.

At the end of trading on Wednesday, the rupee was quoted at 297 for selling and 294 for buying purposes, according to data provided by the Exchange Companies Association of Pakistan (ECAP). A day earlier, the closing rates were 296 and 293, respectively.

Rates in the inter-bank and open markets are now firmly close to each other, reducing the premium that is one of the structural benchmarks of the International Monetary Fund (IMF) programme.

In the inter-bank market, the rupee settled at 293.88 against the US dollar.

The rupee has regained momentum in recent weeks, owing to a countrywide crackdown by law enforcement agencies against illegal exchanges and smugglers of currencies.

Apart from the government’s administrative measures, the State Bank of Pakistan (SBP) also announced structural reforms, directing commercial banks to establish their own ECs as fully-owned subsidiaries. So far, three banks have announced establishing the ECs.

Meanwhile, expressing concern over reports that the government is considering closing exchange companies, Malik Muhammad Bostan, Chairman of the Exchange Companies Association of Pakistan (ECAP), on Tuesday said these reports have created panic in the exchange business.

“In this regard, we have contacted the government and higher authorities on Tuesday and categorically rejected the allegations that ECs are involved in the black marketing of dollar,” he said.

He said that it has also made it clear that ECs have no role in the volatility in the currency market and fully support the government’s move and actions being taken against black marketers or illegal currency dealers, involved in the black marketing of dollars.