Sunday , September 27 2020
Breaking News
Home / Breaking News / Dollar plunges below Rs98, price of POL must lower down
Dollar plunges below Rs98, price of POL must lower down

Dollar plunges below Rs98, price of POL must lower down

KARACHI: The Pakistani rupee hit eight-month high on Wednesday against the dollar, trading below the key psychological 100-to-a-dollar level.

Dollar further plunged to Rs97.90 in interbank and Rs98.00 in the open market during the day, witnessing Rs2.40 decease in the open market.  Foreign currency dealers said that the rupee maintained its upward journey for the second consecutive day both in the interbank and open market.

Last time rupee underwent such a drastic appreciation was following the 9/11 attacks when it gained 6.2% against the dollar in Sept-Dec 2001.

But the rupee lost a whopping 9 percent versus the greenback in the first six months of the current fiscal year.

“Dollar inflows in the market are more than the expectations of the market participants,” said Mohammad Sohail, Chief Executive of Topline Securities, referring to $750 million inflow under the Pakistan Development Fund.

Dealers said that another $500 million is expected by the end of current month from the International Monetary Fund.

Similarly, overseas Pakistani workers remitted an amount of $10.245053 billion in the first eight months (July to February) of the current fiscal year, showing a growth of 10.95 percent.

“All these inflows are having a positive impact on the rupee. I think it should now stabilize in the 98-102 level range going forward,” Sohail said.

“Ishaq Dar’s expectations proved right and the market proved wrong,” he added.

On the other hand, renowned economist Dr Salman Shah also seems to support this line of reasoning. “Forex markets operate on demand and supply; the excessive quantity of US currency in the market is what seems to be pushing the exporters to sell off their own dollars and convincing others to shift investments from other sources to dollars.”

“If remittances continue rising, exports increase because of the grant of GSP Plus status, imports drop and the recent memoranda of understanding signed with different countries translate into investment, the exchange rate will maintain this trend,” said Shah and added, “Otherwise the rupee will lose ground against the dollar again.”

Over couple of months back, Finance Minister Ishaq Dar had said in a statement that the government would bring back the rupee below 100-to-a-dollar level.

It may be pointed out that marking the strongest appreciation of last few months, the rupee gained as much as 7.7% against the dollar since November 28 when the rupee-dollar parity in the interbank market stood at Rs107.80. Due to dramatic appreciation in rupee value, bill of imported goods would be lowered down considerably. Similarly, bill of oil import, accounting for roughly 40% of total imports, would also be reduced. Hence, around 8% rise in the value of rupee against the dollar should result in decrease of Rs10 per litre in the price of petrol and diesel.

It is worthy to mention here that approximately $8.84 billion were spent on the import of petroleum and associated products between July 2012 and January 2013.

Due to wonderful appreciation in rupee value, Customs Today on behalf of general public appeals to the honourable Prime Minister Nawaz Sharif to reduce the price of petroleum products to provide relief to the masses as decrease in petrol and diesel prices would bring about tangible reduction in transportation charges, resulting in lowering of prices of essentials including food stuffs and vegetables.