Currency dealers reported a 22 percent or $70 million decline in the sale of US dollars to commercial banks during the month of February.
Chairman of the Exchange Companies Association of Pakistan Malik Bostan said currency dealers sold about $320 million to banks in January and $250 million the following month. He pinned the drop on market closures on Kashmir Day and the February 8 General Elections.
February is the shortest month of the year and saw market closure for half of its duration which also contributed to the drop in dollar sales, he added.
Bostan was optimistic about higher inflows in March. Inflows increase during Ramazan by up to 20 percent due to Zakat, charity, and higher consumption.
The exchange rate could remain strong in the near future if Pakistan successfully receives the $1.2 billion final tranche under its Stand-By Arrangement with the International Monetary Fund.
It bears mentioning that remittances from overseas Pakistanis fell 6 percent during the period in review. Meanwhile, foreign exchange reserves held by the State Bank of Pakistan declined twice in the past few weeks.
