Dollar shortage in the open currency market caused buyers to panic on Monday, as the price of US Dollar rose up by Rs. 1 reaching Rs. 113. The Forex Association of Pakistan has blamed State Bank of Pakistan’s (SBP) decision for this shortage.
On Monday, the currency market was rife with panic which continued till mid trading session. During the session, Dollar was seen trading at Rs. 113, showing an increase of Rs.1. At mid session, SBP sent out a strong message to exchange companies causing the decline in Rupee to stop. Rupee then started gaining its value and at the end of the open market trading session, its value increased by 70 paisas against the Dollar.
Malik Bostan, Chairman Forex Association, told ProPakistani that last week SBP issued a circular, ordering the exchange companies not to fully export Kichra (this term is used for currencies other than US Dollar in the forex market). Now exchanges companies are exporting 35 percent Kichra and 35 percent of it is handed over to banks.
“As per agreement, banks were bound to exchange Kichra the same day, but banks were not able to fulfill their commitment. They exchanged Kichra in 2 days which caused a shortage of US Dollar.” Malik Bostan added.
He further said that after seeing panic in the open market, SBP intervened and contacted the exchange companies. He said,
We explained our situation to the regulator and SBP asked the banks to start clearing Kichra during the given time. After SBP’s intervention market started to cool down and closed at Rs.112.50.