Grey market loses lustre as banks offer higher rates

For the first time the dollar rate against the rupee in the ‘grey market’ fell significantly lower than that of the open market on Tuesday, reflecting a loss of attraction for dollars smuggling to Afghanistan. The dollar sold at Rs273 in the grey market, dubbed the Kabul market, and at Rs282 in the open market. The situation has changed after the free-floating of the exchange rate in Pakistan. The dollar rate in interbank appreciated by 98 paisa to Rs276.28 from Rs275.30 a day before. While the interbank market was silent over talks between the government and the International Monetary Fund, currency dealers said they were getting some liquidity from banks. Dollar price in ‘Kabul market’ plunges to Rs273 However, they maintained that the smuggling of dollars to Kabul continued which is a real problem for Pakistan already facing a serious shortage of greenbacks. Some currency dealers said Afghanistan depends largely on smuggled dollars from Pakistan since Kabul has no exports. They said though the smuggling has lost attraction, it continued.