Sharp erosion in the gap of the official and open market rates might strengthen the dollar further in the coming days and also help improve the remittances from overseas Pakistanis, currency market experts said on Wednesday.
This perception was widely emerging in the market as the dollar extended its overnight gains in the interbank market, picking up 12 paisa at Rs 58.13 and Rs 58.15 for buying and selling, respectively, marketmen said.
They observed that the increased dollar buying for debt payments had pushed the rates higher in the interbank market and the present trend might continue. The US currency value was also likely to go up in the open market, they added.
Sliding in rupee value in the interbank market is likely to encourage overseas Pakistanis to send money through official channels, they said. This would definitely discourage the hundi business but on the other hand there are fears that opportunists might begin speculative trading in dollars to boost their business.
The State Bank is expected to keep a watch on dollar's recent rise in the local market to ward off speculative trade, they said.
The idea can not be rule out because during the third quarter of the current fiscal year, the remittances had started showing weakness, analysts said.
In order to deal with the export competition of world markets, rupee exchange rate has to be kept flexible, according to the need of the time. Under the circumstances, it seems that the dollar might maintain its winning spree as inflows are not matching with the outflows.
The dollars are short in supply as many investors have held dollar stocks firmly on perception of more recovery in its value versus rupee, they added.
Besides, present direction of the dollar is expected to benefit exporters, they observed.
The rupee shed three paisa versus dollar for buying at Rs 58.45 and lost eight paisa for selling at Rs 58.55 on rising demand for dollars, dealers said.
================================
Kerb buying Rs 58.45
Kerb selling Rs 58.55
================================
==============================
Buying Rs 58.13
Selling Rs 58.15
==============================
=================================================================
Repo Rates (Yield p a)
-----------------------------------------------------------------
Tenor Low Bid High Bid Low Offer High Offer Average
=================================================================
Overnight 0.05 0.10 0.15 0.30 0.15
1-Week 0.50 0.75 1.00 1.25 0.88
2-Week 2.30 2.50 2.70 2.90 2.60
1-Month 2.30 2.50 2.70 2.90 2.60
2-Months 2.30 2.50 2.70 2.90 2.60
3-Months 2.40 2.60 2.80 3.00 2.70
4-Months 2.40 2.60 2.80 3.00 2.70
5-Months 2.50 2.70 2.90 3.10 2.80
6-Months 2.60 2.80 3.00 3.20 2.90
9-Months 3.00 3.25 3.50 3.75 3.38
1-Year 3.25 3.50 3.75 4.00 3.63
=================================================================
Call Rates (Yield p a)
-----------------------------------------------------------------
Tenor Low Bid High Bid Low Offer High Offer Average
=================================================================
Overnight 0.10 0.30 0.20 0.40 0.25
1-Week 0.75 1.00 1.25 1.50 1.13
2-Week 2.50 2.75 3.00 3.25 2.88
1-Month 2.50 2.75 3.00 3.25 2.88
2-Month 2.50 2.75 3.00 3.25 2.88
3-Month 2.50 2.70 2.90 3.10 2.80
4-Month 2.60 2.80 3.00 3.20 2.90
5-Month 2.70 2.90 3.10 3.30 3.00
6-Month 3.00 3.25 3.50 3.75 3.38
9-Month 3.25 3.50 3.75 4.00 3.63
1-Year 3.50 3.75 4.00 4.25 3.88
=================================================================