The dollar appreciated against rupee to 157.9 in the inter bank market value, representing gains of Rs.3.65 against the rupee. Meanwhile, in the open market, the greenback rose by Rs. 3.65 to Rs.157 from Rs.154.3 last week. The dollar has appreciated by 1.75 percent compared to last week in the interbank market value.
According to Exchange Companies of Pakistan former general secretary Zafar Paracha, during the past few days, foreigners had been unloading their positions in the stock market $16.7 million last week and repatriating back the dollars, which had put pressure on the interbank rate. This has been compounded by the stock market panic witnessed on Monday after the OPEC talks between Saudi Arabia and Russia broke down and oil prices saw a 30% decline.
According to FBR, 9880, people are based in Lahore. The list of these people has been sent to the Regional Tax Office in Lahore in February
Moreover, he said there was no fundamental change behind the sudden increase in the greenback and was part of the general panic in markets worldwide due to the coronavirus. But given the State Bank’s strong control mechanisms, it would be back within a few days.
The impact of dollar appreciation against Rupee on business
Due to depreciation of the rupee against dollar in interbank, the burden on economy pertaining to import payouts and the decline of remittances will be inevitable.
The drop is seen on worries that the flow of dollars may slow down into Pakistan on account of slower exports and workers’ remittances. The inflows may decrease due to likely drop in demand for Pakistani goods in the export markets.
In addition to it, the worst slump in international oil prices – since the 1991 Gulf War – may slow down remittances. Majority of Pakistani expatriate workers are living in oil-producing and exporting countries i.e Saudi Arabia and the UAE.
The Dollar hoarding mafia in Pakistan
Federal Board of Revenue has been investigating since January 24,000 Pakistanis who purchased dollars in bulk in 2017-18. FBR stated that they are currently examining the tax records of these people before investigating them.
According to FBR, 9880, people are based in Lahore. The list of these people has been sent to the Regional Tax Office in Lahore in February.
The regional office has also issued notifications to some of these people. FBR will ask them about their source of income through which they bought large sums of foreign currencies.