The US dollar exchange rate in Pakistan’s interbank market went up by Rs 2.10 today, Monday 24, August 2015 to reach the highest rate over almost the past year and a half.
The rate, currently standing at Rs 104.10, is being attributed by some to influential exporters who are allegedly trying to create instability by buying large quantities of dollars.
According to economic experts, such depreciation of Pakistani rupee against the dollar will cause inflation if it continues.
Money changers and currency dealers are however of the opinion that Hajj pilgrims are responsible for the purchase of large amounts of foreign currency, including Saudi riyals and US dollars.
Since Saudi riyals are being bought up heavily by pilgrims, the foreign currency reserves to sell in Dubai for remitting dollars into the country are being depleted.
The State Bank too recently changed regulations to allow currency dealers and money changers to bring US dollars from Dubai to Pakistan directly instead of going through a longer process.
Since the government imposed withholding tax on bank transactions, some traders have resorted to buying dollars and making transactions in dollars and keeping them in their bank lockers instead of depositing them in their accounts.
Following news of the Rupee’s depreciation against the dollar, Karachi Stock Exchange (KSE) also came down by 1,400 points to stand at 33,000 points.