The government’s attempt to bring the dollar down to Rs. 250 is facing failure with the USD trading above Rs. 280.
Following a crackdown on dollar smuggling launched on July 23, the rupee appreciated by around Rs. 3 in both the interbank and open markets. However, this marginal gain has failed to close the gap between official expectations and market reality, reported Dawn.
The US dollar remained quoted at Rs. 285.15 in the open market and Rs. 282.87 in the interbank on Wednesday.
Recent meetings in Islamabad involving banks, currency dealers, and jewellers revealed that authorities continue to press for a Rs. 250/$ exchange rate. However, participants dismissed the target as unrealistic.
Dealers report severe shortages of major foreign currencies, including the dollar, euro, and pound. Many believe a parallel market has re-emerged, offering rates above ECAP’s official rates.
The perception of shortage is driven by resistance to price controls rather than actual supply issues.
In the interbank market, banks authorized by the State Bank of Pakistan to sell dollars to importers are charging higher rates and prioritizing their own clients.
While imports have risen in FY25 compared to last year, a sustained rupee recovery to Rs. 250 looks unlikely. Experts say economic fundamentals do not support a stronger rupee.
This seems more like a partnership between exporters and money changers.
But I hope Government takes more serious and severe actions against this nexus.
From RS 170 to 280 per dollar was raised due to IMF pressure. This was unrealistic and artificial. Extraordinary measures and strict action can only bring it down. Reducing it doesn’t suit dealers hoarding it. But country pays the price.