The imposition of one-month ban on import of gold has sharply reduced the dollar demand in the open currency market. Talking to Business Recorder, Malik Bostan, Chairman Exchange Companies Association of Pakistan (ECAP) said the ban on import of gold by the Economic Co-ordination Committee (ECC) of the Cabinet has put positive impact on the currency market and PKR has further appreciated against the dollar, which traded at Rs 102.70 on Wednesday evening, he added.
Last week, ECAP demanded a temporary ban on gold import as higher gold imports raised the dollar demand in the domestic currency market. On the demand of ECAP, the ECC Tuesday decided to ban gold import for one month. Bostan said with imposition of ban, currency market is gradually improving and now surplus dollar is available in the market. “The daily greenback demand has reduced to 10-15 million compared to 35-40 million a few days back.”
He said the government should design a new policy for gold import that allowed only three months for re-export of gold in shape of jewellery. The ECAP Chairman also thanked Finance Minister Ishaq Dar and State Bank Governor Yaseen Anwar for taking serious and immediate steps on the ECAP’s suggestion. He said for last few months, gold import rose sharply and a massive surge of some 400 percent has been witnessed due to decline in the commodity prices in world market and imposition of 6 percent duty by Indian government.
The imported gold was also being smuggled to India as import of gold was not viable after 6 percent duty. The higher dollar demand for the import of gold was the main reason for some 5 percent depreciation of PKR to the dollar during last few weeks, he added. “We are expecting that PKR will further gain during next few days as demand is gradually declining, besides sufficient supply of dollar,” Bostan said.