Rupee plunges 2.6pc in open market amid dollar shortages

The rupee, facing the brunt of dollar shortages, plunged 2.6 per cent against the greenback in the open market on Monday as speculators are holding back their foreign currencies anticipating further appreciation. The currency dealers said that despite very thin business volume, the open market was dry, which allowed the dollar to resume its upward trend and closed at Rs308, an increase of Rs8 from Friday’s close. A trust deficit was also noted as people claimed that the State Bank of Pakistan and the government artificially planned to bring down the dollar in the open market. This perception discouraged the general public from selling their foreign currencies and led them to wait for further changes. Last week, the SBP allowed banks to purchase dollars from the open market for credit cards, which are used for international payments. This decision swiftly led to a decline in the dollar’s value in the open market, ranging from Rs11 to Rs15 per dollar. The dollar reached as low as Rs298-299, compared to its previous range of Rs318 to Rs320.