The cap will be removed from 25th January onwards and now rupee will be allowed to depreciate as per its actual value. Earlier, the currency dealers have unanimously decided to keep the rupee overvalued artificially in the open market against Dollar.
After the announcement, is it speculated that Rupee would devalue fast and will near its value in the black market i.e., Rs, 250-260 per Dollar. Rupee was overvalued artificially till Tuesday at Rs. 238/dollar.
Malik Bostan, President Exchange Companies Association of Pakistan (ECAP), held a Zoom meeting in which he said, “The Association has decided to remove the cap on the rupee-dollar exchange rate with effect from Wednesday (January 25).”
He added, “The move will help eliminate black currency markets, increase the flow of foreign currencies to the dealers and will be available to the public for international traveling, education and hospital fees.”
He further said, “People are buying dollars from the open market (at Rs238) and selling them in the black market (at Rs250-260), making it a business to mint profit.”
“The availability of market-based currency rates to individual buyers and sellers will convince them to return to open market counters. This will automatically crash the illegal markets as people feel safe working with legal entities.”
Bostan concluded, “We have informed him (Hussain) that the decision to cap the currency has negatively impacted the country under a fast-changing economic situation.”
He also hopes that this action will further strengthen the value of rupee against Dollar.
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