Pakistani rupee tumbles to 104.8 vs dollar

The Pakistani rupee today tumbled to 104.80 on surging demand for US dollar, recording 4.5 per cent slump in the last 50 days, experts said.
The free fall in rupee has renewed concerns about the health of the debt-ridden economy even as the country is expected to secure an estimated USD 6 billion funding from the IMF.
On June 5 when Nawaz Sharif took oath as Prime Minister and formed his government the rupee traded at 98.47 against the dollar in the inter bank and 100.20 in the open market.
"The Pakistani rupee has dropped by 4.5 per cent against the US dollar in the last 50 days which is a lot," said Ahmed, a local dealer in the currency market on Bolton road.

He said the open rate of 104.80 in the open market on Thursday had created a record gap in the dollar price in the inter-bank and open market.
"This is a rapid devaluation and the rupee has lost almost 4.5 per cent against the US dollar in the open market," the dealer added.

The inter-bank market, however, which generally accepts the Pakistan Central Bank's influence to some extent, has recorded a devaluation of about 2.4 per cent.
"Perhaps the government believes that the situation will be controlled once they get payment for the six billion dollars deal finalised with the IMF," another forex expert said.

"We bought dollar at 104.50 rupees and sold at 105.80 rupees during the session on Wednesday," said Anwar Jamal, a currency dealer.
The currency dealers said that the demand was high but the physical shortage of dollar was visible in the market.
The increasing gap in the dollar price of open and inter-bank market reached historic levels in the currency market, said experts.
The open market is offering a record premium of 3.75 Pakistani rupees on each US dollar compared to the inter-bank.
"If the gap widened between the open market and inter bank rates, this could have adverse impact on government earnings from overseas remittances," said Siddiqui, an economist.

He added that the previous government never allowed the gap to be widened more than 1.5 Pakistani rupees in the rates of dollars within the two markets.
According to a central bank report the total liquid foreign reserves held by the country stood at USD 10202.7 million on July 19, 2013.