KARACHI: The demand for Saudi Riyal has surged by about 30 percent in the open market due to the seasonal impact of Umrah and Hajj, with currency dealers in Pakistan noting on Wednesday the spike in demand is being managed with sufficient supply of the foreign currency.
A large number of Muslims prefer to perform Umrah in Saudi Arabia during the Islamic fasting month of Ramadan to further deepen their spiritual experience, and the Saudi authorities have been facilitating pilgrims, leading to a massive growth of people flying into the kingdom from different parts of the world.
In January, Saudi Minister for Hajj Dr. Tawfiq Al-Rabiah said the number of Umrah pilgrims arriving in the country last year reached 13.6 million, reflecting a 58 percent increase since 2019.
Speaking to Arab News, Malik Bostan, chairman of the Exchange Companies Association of Pakistan (ECAP), mentioned that about 800,000 Pakistanis performed Umrah by the end of Ramadan in 2023, and the number is expected to increase this year.
“We have seen about a 30 percent surge in the demand for Saudi Riyal, mainly due to the aspiring Umrah pilgrims which indicates their number may increase this year,” he explained.
“The spike in demand also comes from those preparing for Hajj this year, as the exchange rate increased last year and many are buying Saudi Riyal in advance,” he added.
Wahab Siddiqui, a member of the executive committee of the Hajj Organizers Association of Pakistan (HOAP), concurred with Bostan, noting the reduced availability of tickets to Saudi Arabia due to the large number of aspiring pilgrims.
“Tickets are not available until March 2024, ahead of Ramadan, indicating that airlines are fully booked compared to last year,” he told Arab News.
The ECAP chairman revealed that the surge in demand for the Saudi Riyal was detected after the export of currency declined to about $20 million from approximately $30 million a month earlier.
“We export about $30 million worth of various foreign currencies to Dubai every month and import US dollars against it,” Bostan said, adding the share of Saudi Riyal in the export was usually about 60 percent.
He assured that the exchange rate would remain stable due to the adequate currency supply in the open market.
Pakistan’s currency dealers surrender US dollars bought from various commercial banks. In January this year, the dealers submitted about $300 million to the banks, according to the ECAP chairman.
“Due to the demand for Saudi Riyal, the volume of foreign currency exports is expected to remain between $12-20 million ahead of Ramadan and Hajj,” he added.
According to ECAP data, the current buying price of the Saudi Riyal in the open market is approximately Rs74.90.
