The value of the United States dollar has equalized in both the interbank and open market on Friday, with the greenback taking a significant hit in recent days.
As the dollar depreciated by Rs3 in the open market, it now stands at a staggering Rs303, effectively bridging the gap between the interbank and open market rates.
The depreciation of the dollar has been particularly pronounced in the interbank, where its value plummeted by Rs1.84 to reach Rs303.10.
This difference has historically played a crucial role in stabilizing currency markets, but recent events have seen it reduced to less than half a percent, a far cry from the International Monetary Fund's (IMF) target of 1.25%.
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Economist Dr. Khaqan Hassan Najeeb has shed light on the underlying issues contributing to this crisis, highlighting the existence of a gray market for the dollar.
Najeeb explained, "The gray market for the dollar has been a thorn in the side of our currency markets for some time. It is a hotbed for speculators who manipulate the exchange rate, leading to distortions in the market. These activities have not only damaged our economy but have also facilitated the illegal transfer of funds abroad, undermining our financial system".
While it may offer short-term relief for importers and consumers of dollar-denominated goods, the long-term implications remain uncertain.
