Liquidity crunch triggers dollar sell-off

The shortage of cash rupee due to the bank holidays provided an opportunity to several money changers to buy the dollar on their own available rates, which was in the range of Rs275 to Rs285 on Monday, currency traders said. The first day trading of the open market after Pakistan’s Standby Agreement (SBA) with IMF for $3 billion created sense of economic stability with better price of the rupee. Due to bank holidays, only a few exchange companies had cash rupees, and even that was limited. Most of the companies were unable to buy dollars despite the rush for sale. “The long holidays of the banks kept the exchange companies out of cash. Only few branches have some cash and they bought dollars at their own available rates which was in the range of Rs275 to Rs285,” said Malik Bostan, Chairman of Exchange Companies Association of Pakistan. On Saturday, when only a few branches of exchange companies were operating at the country’s airports, the dollar was traded in the range of Rs280-283.