KARACHI. The selling of dollars to banks fell by $70 million in February, said currency dealers on Monday.

The open market had been selling over $300m for most of the months in the current fiscal year.

“In January we sold about $320m to the banks but it fell to around $250m in February,” said Malik Bostan, Chairman Exchange Companies Association of Pakistan.

“The decline was due to the market closures on account of Kashmir Day and the general election in February,” he said and added that the month was the shortest of the year. The market remained closed for half of the month when weekly holidays were included, he added. Remittances sent by the overseas Pakistanis also fell in February by 6pc compared to January. The low inflows were a reflection of a decline in the State Bank of Pakistan’s foreign exchange reserves. The reserves fell twice in the last couple of weeks.

However, currency dealers were sure that inflows in March would be higher.

“Usually inflows of remittances increase in Ramazan up to 20pc due to Zakat, charity and higher consumption during the holy month,” said Mr Bostan.

The highest remittances of $2.5bn were recorded in March 2023.

Currency experts in the interbank market said the stable exchange rate is the key to higher inflows of export proceeds. Exporters were selling proceeds without delay as the rupee appeared stronger during the last three months.

They believe the exchange rate will remain stable during the next two months amid strong hopes of receiving $1.2bn from the IMF.

Published in Dawn, March 12th, 2024