ECAP sees dollar dropping to Rs250 soon

Bostan says recent spike in USD is purely temporary, attributes it to reopening of new import LCs

KARACHI:

The Exchange Companies Association of Pakistan (ECAP) anticipates a gradual decline in the US dollar's value to first Rs270 and subsequently to Rs250 following the disbursement of funds from the International Monetary Fund (IMF).

The comments from ECAP Chairman Malik Bostan come as the Pakistani rupee sustained losses against the greenback on Monday, weakening 0.68% in the inter-bank and settling at 279.8, a Rs1.9 decrease, as per the State Bank of Pakistan (SBP).

Interbank closing #ExchangeRate for today https://t.co/9NkXNq0O3o#SBPExchangeRate pic.twitter.com/sEONrzxoFM

— SBP (@StateBank_Pak) July 10, 2023

According to Bostan, the recent spike in the dollar's interbank rate is purely temporary. He attributed the surge to the reopening of new import LCs (Letter of Credits), which has increased demand for the dollar.

The situation arose after a lengthy period during which payments for about 6,000 import containers had been stalled and restrictions on imports had been lifted. Bostan emphasised that the dollar's value would stabilise once the current high demand is met.

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During the previous week, the rupee had gained a substantial 2.91% against the US dollar with the finalisation of the Stand-By Arrangement (SBA) with the IMF strengthening the local currency.

Applauding the government's recent inflation-related policies, Bostan said that the regulator and ECAP are keeping a close eye on market speculation.

However, he expressed concern over the decrease in workers' remittances, noting the global need for ten million skilled workers and emphasising the development of Pakistan's skilled workforce as an urgent necessity.

If skilled individuals are trained and sent abroad, the country may potentially see monthly remittances increase to the equivalent of $4 billion, he said.