US dollar is becoming a real gold in kerb market

The Karachi Stock Exchange: For a short-term period US dollar has a great increase. For this time the US dollar went up to 70 paisas against the rupee in the open currency market that was hold on Tuesday to close at rupee 79.20 for buying and rupee 79.50 for selling.
Interestingly that such a high rate was the demand for dollar while open currency market activities. Amazingly a rush for dollar provoked some exciting events in the open currency market. For example, one moneychanger being there said he was buying US dollar at Rs 79.50, but he had closed selling. What’s more another famous exchange company announced they were just buying dollars but not selling. A leading moneychanger pointed out “Today people are mad about dollar. It’s a kind of common panic. People have heard from somewhere that some bank is going to come to ruin, so they are taking back their money from banks and in a fussy way buying dollars from us.”
Interbank market report: The US dollar increased to Rs 78.70 in the interbank market on Tuesday from rupee 78.35 level observed on Monday.
“We are making just payments but we can’t see any inflows,” noted a senior treasury public officer at a large local bank. “We should admit the fact that the interbank market has some evident problems to meet customers’ demand for US dollar, which is pushing the dollar rate higher.”
He also admitted the situation was ‘hard’ as the central bank couldn’t support the domestic currency via injections following the exhaustion of resources in foreign exchange reserves.
Meanwhile last week the State Bank had reported that Pakistan’s foreign exchange reserves dropped by 690 million dollars to 8.13 billion dollars in the week that came to an end on September 27. Currently the reserves are about half the size of the record 16 billion dollars to add the level seen in October in 2007. The country’s foreign exchange reserves are keeping to decrease because of growing imports, congested exports and run-out of foreign investment from stock markets. Analytics say that reserves may drop further if the country imports cotton production and manure. Asian Development Bank gave a 500 million dollar lend last week. This amount is likely to help to foreign exchange managers but currently they require some more funds.