Dollar hits Rs210 amid rumours of stopping LCs.

KARACHI -- The US dollar kept pressing the local currency on Monday and appreciated Rs1.21 to close at Rs209.96 in the interbank market.

However, the State Bank of Pakistan's (SBP) dollar price was lower than the one quoted by the exchange companies which sell 95 per cent of their dollars to the banks.

The Exchange Companies' Association of Pakistan quoted the greenback price at Rs210.20 while the bankers also said the price was higher than the SBP's closing rate.

'The first session saw greenback crossing Rs209 per dollar while the tom (tomorrow) value was more than Rs210. It means the next day the dollar may open at Rs211,' said Atif Ahmed, a currency dealer in the interbank market.

However, the currency market remained in the grip of uncertainty and rumours that banks have stopped opening letters of credit (LCs).

Mr Atif said these days rumours are part and parcel of the currency market since the situation is fluid due to low foreign exchange reserves.

When contacted, the SBP also denied such a situation and said the LCs were being opened as usual. 'State Bank has not stopped banks from making import payments. Even today, roughly about $200m import payments have been executed,' SBP Chief Spokesman Abid Qamar told Dawn on Monday.

The SBP has, however, required prior approval before the opening of LCs or registration of contracts for certain types of imports like cars (CKD), cellphones and certain types of machinery. But...