In dollars we trust, all others take a back seat

Despite proclamations of ‘all is well’ from the country’s financial managers, anyone who has recently tried to buy foreign currency will tell you that things are dire. Dollars have disappeared from the open market, while a crisis in the inter-bank market has led to the stoppage of foreign payments. The country is unable to clear the dues owed to airlines or make payments for imported goods waiting at ports. Opening letters of credit (LCs) has become a challenge and transactions with the country’s foreign missions are also proving problematic. The ascendant dollar is not a Pakistan-specific problem; according to Atif Ahmed, a currency dealer, the war in Ukraine has contributed to the strengthening of the US dollar. “The economies of the European Union were badly affected by the gas and oil supply cut from Russia, but the US remained strong being self-sufficient. As a result, the dollar became stronger against the euro and the pound as trust in the greenback increased,” he said. “When Russia asked oil buyers to pay in rubles, this caused demand for the dollar shoot up as countries hoping to buy cheap Russian oil have started buying dollars to convert to rubles,” Mr Ahmad said.