KARACHI: High inflows of dollars in the open market forced the greenback below Rs105 on Wednesday, barely a month after the currency touched the height of Rs106 in the last week of April.
Currency dealers said the inflows of dollars were very high while in comparison the demand fell sharply. Many customers were observed selling the US currency, they added.
“The dollar was traded as low as Rs104.70 while we sold dollar at Rs105,” said Secretary General Exchange Companies Association of Pakistan, Zafar Paracha.
The currency market was badly shaken in mid-April when currency dealers came to know that the federal government had decided to impose 16 per cent excise duty while the Sindh government imposed 14 per cent sales tax.
A number of exchange companies received notices for the payment of 16pc excise duty.
One of the large companies said the amount of excise duty was deducted from its account.
However, later Finance Minister Ishaq Dar announced the withdrawal of the excise duty from the gross profits of the exchange companies which eased the open market and dollar started coming down against the local currency.
Currency dealers said the month of Ramazan brings in large amount of dollars each year which changes the exchange rate scenario at least for a month.
“The dollar would soon be sold at Rs104.50. We expect it may fall further with the influx of dollars during Ramazan,” said Paracha.
Millions of dollars are sent from the world over to Pakistan. These remittances include money for family support as well as charity and Zakat.
Most of the big charity organisations working in the country mostly depend on these inflows from rich Pakistanis living abroad.
Donations also come from friendly Muslim countries for these organisations.
Currency dealers said due to higher spending during the holy month and for the celebration of Eid, inflows for family support become more than double.
“The dollar is in surplus. We witnessed 60 per cent people were selling dollars in the market while there are no more than 40pc buyers in the open market,” said Anwar Jamal.
He said the remaining demand for dollars in the market was due the fact that thousands of Pakistanis are still leaving for Umrah.
“Both Saudi Riyal and dollars are bought from the market. Riyal gained against the Pak rupee and was sold at Rs28 while it was traded at a lower rate before Ramazan,” said Jamal.
Currency dealers in the inter-bank market also witnessed some dollar depreciation.
The dollar was traded at Rs104.55 to Rs104.65 while the selling price was in the range of Rs104.85 to Rs104.95 before Ramazan.