Short supply of dollars in the open market here has drastically shrunk its availability to just 10 percent while demand is still rising, said exchange companies. The newly born exchange companies found the situation difficult to deal with as pressure was mounting from the regulatory authority to check the spiralling rate of the greenback.
"How can we control the prices when physical shortage of US dollars is continuously fuelling the already existing demand?" said the owner of an exchange company.
Those exchange companies which used to have up to 300,000 dollars at a time on daily average now keep only about 25000 to 30000 US dollars.
"We are not selling big amounts, of more than 5000 dollars," said Anwar Jamal of Galaxy Exchange Company. He said the ratio of buyers and sellers has also widely changed and it has gone out of balance. "Currently, 70 percent are buyers while only 30 percent are sellers," he said.
Despite higher remittances in the first quarter of the current fiscal year, the physical presence of dollars is extremely short both in the inter-bank and the open market.
The inter-bank currency dealers said that one-month premium was 9 paisa while for three months it was 30 to 35 paisa, showing higher demand.
Both the inter-bank and the open market dealers said the exporters were hoarding dollars and were not coming out with their export proceeds. Export proceeds are the main source of dollars supply in the country.
Currency experts believe that widening trade deficit and high oil payments are the main causes of Pak rupee weakening.
The crude oil has touched record 55 dollars per barrel while Pakistan's trade deficit is also widening. Pakistan would have to pay additional 900 million dollars for import of petroleum products as Saudi oil facility has ended. It would further put pressure on dollar prices and cause widening of trader deficit which is already under strain, experts said.