Dollar was available at cheaper rates on open (kerb) market than in banks on Tuesday. At interbank close (13.30 hours), the official parity was Rs 74.40 to a dollar while there were plenty of dollars available with exchange companies at Rs 74 to a dollar in the afternoon. It was an extremely volatile day on the exchange market.
The interbank market opened at Rs 76.15 to dollar; 75 paisa higher than yesterday close at Rs 75.40 soon the rupee strengthened by 40 paisa as the parity dropped to Rs 75.75 to a dollar. Soon, thereafter, the rate moved in a see-saw to drop to Rs 73.00 to a dollar. Again the rate moved upward to Rs 74 to drop once again to Rs 73.00. But the rate could not be sustained at the level and dollar was available at Rs 74.90 and then at Rs 75 to a dollar. Finally, the day closed at Rs 74.40 - one rupee gain from the opening rate.
In the afternoon, when bank treasuries had closed dollar was available at Rs 74.10. And, money changers were buying greenback at Rs 74.00. According to sources, there was a heavy flood of dollars from Peshawar. Late in the evening there were sellers at Rs 73.75 but no buyers. Banks can only buy dollars from exchange companies until 1400 hours.
They are debarred by the SBP to transact any deal on tomorrow value from any customer including exchange companies. Only banks can sell the currency to SBP and exchange companies can only route their sale through banks since SBP does not buy any forex directly from them.
SBP also injected Rs 25 billion on Tuesday, undertaking four-day OMO auction to ease liquidity conditions as oil payment drain off three to four billion rupees from the interbank market on daily basis. Next week SBP is scheduled to hold two auctions. One for Treasury Bills and the other for long-term Pakistan Investment Bonds. The exchange companies have surrendered as much as $55 million to banks in the last two days on fast changing political scenario.
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