Ever since the Dollar has been let go off by the State Bank, it has continued to adjust in the interbank market. The rate has been adjusting to market dynamics, however, desired equilibrium is yet to be achieved.
Forex market opened today on a relatively high note, from 110/110.5 at the outset. The SBP Settlement Rate for yesterday clocked in at 108.1785. The Dollar opened with a nonchalant trip upwards.
The Rupee devalued significantly in the opening hours after closing at 108.50 yesterday, opening at 108.80 at Monday’s open. However, it reached 110.00 before falling to 109. Currently, the greenback is trading at 111/111.50.
The Rupee slide has resulted in a panic among importers who continue to search for a stable price amid the ECG looking movement on the Exchange Rate Graph.
In addition to that, money changers were saying that they have been running on short supply for Dollar, currently tarding in the open market at 111.50.
In a statement addressed to the market on 8th of December, the Central Bank justified the exchange rate fluctuation. SBP announced that it from henceforth it will let the market demand and supply adjust the rate intervening only when it deems necessary.
The policy change from SBP vis-à-vis Exchange Rate has had importers scratching their heads. With the mammoth trade deficit and huge import bill, the economy is set to see a surge in prices of everyday items. Inflation targets are expected to be revised upwards as imports become expensive.