According to another analyst, with a limit on buy-sell spread, it also made sense for the banks to offer less to exporters on a day when they didn’t have to sell too many dollars to the importers. Assuming nothing else changes, I expect that with the new month, demand pressure will start building again which could drive up the price of the dollar again,” said one analyst talking on condition of anonymity. “This extra supply with a temporary drop in demand has led the interbank market to cool off for a day. With t he Interbank market experiencing a temporary decline in demand, coupled with a relatively higher supply of dollars through official channels on the back of the interbank rate going as high as Rs 270 yesterday. With most banks having exhausted these limits for the month of December, there was very little pressure in the interbank market to make import payments on the last day of the month. However in order to understand what forces were at play in the open market we need to first see the interbank market and understand specific dynamics that have led to the dollar slipping in value slightly.Īccording to sources familiar with its workings, the drop is attributed mainly to the monthly import limits set by the State Bank of Pakistan (SBP) for each bank for import of non-essential imports. While the decline in the dollar rate in the open market is commonly assumed to be a result of speculative behavior, with more people willing to sell their dollars than those willing to buy, particularly in light of the ongoing talks between the government and IMF, the reality on the ground was very different. A similar trend was observed in the open market today with the currency dealers asking for Rs 269 per USD, against the previous day’s rate of Rs 275 per USD, leaving many to ponder the reasons behind this sudden drop in the dollar rate. LAHORE: The value of the dollar fell by almost Rs 5 in the early trade on Tuesday, as the greenback settled the day’s trade at Rs 267.89 with a loss of Rs 1.7 in the interbank market.
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