Dollar falls below PKR 220 in early interbank trading

KARACHI: The sharp decline in the US dollar against the Pakistan Rupee (PKR) continued on Friday as the foreign currency fell below PKR 220 in early trading in interbank foreign exchange market.

The dollar is being traded at PKR 219.81. So far in early trade the greenback lost PKR 2.13 as the exchange rate ended at PKR 221.91 a day earlier in the interbank foreign exchange market.

Currency experts said that the emphasis of the finance minister regarding the actual value of the dollar was impacting the market.

Finance Minister Ishaq Dar a day earlier once again stated that the local currency was undervalued and the actual value of the dollar was below PKR 200.

A day earlier the US dollar weakened against the PKR for the 10^th consecutive sessions on Thursday amid tight monitoring of foreign currency transactions.

The exchange rate witnessed an appreciation of 17.77 in rupee value against the dollar during the last 10 straight sessions.

The exchange rate reached to near record low of PKR 239.71 on September 22, 2022 to the dollar but ended at PKR 221.94 on October 06, 2022.

Currency experts said that tight monitoring of the State Bank of Pakistan (SBP) on foreign currency transactions helped the rupee to make gain.

Recently, the SBP had amended foreign exchange regulations with an objective to promote documentation and transparency in the foreign exchange transactions between exchange companies.

In terms of revised regulations, it has been made mandatory for Exchange Companies, Franchises of Exchange Companies and Exchange Companies of ‘B’ Category to settle Pakistan Rupee consideration of all foreign currency purchase/ sale transactions conducted among themselves through their bank accounts.

However, in order to ensure transparency, it has been advised that Exchange Companies and Exchange Companies of ‘B’ Category shall not carry out any business activity during the period in which CCTV system is non-functional at any of their outlet for any reason, including technical faults, until the functionality of the CCTV system is restored.

Moreover, minimum preservation period of video recording through CCTV system has been enhanced from two to six months or until the inspection of the company by SBP, whichever is earlier.

This would ensure availability of CCTV recording for audit/inspection purposes, according to the SBP.

The local currency witnessed the historic low at PKR 239.94 to the dollar on July 28, 2022.