KARACHI - The gap between the inter-bank and the open market exchange rate of dollar-rupee widened to Rs 1.20 that could encourage the 'hundi' business in the country. In the inter-bank the dollar-rupee exchange rate climbed up to 73.80 while in the open market the exchange rate surged to at Rs 75 while the currency dealers said the open market exchange rate could hit 80 any time due to macroeconomic imbalances and frequent political changes. "Despite worsening inflationary and fiscal outlook, the local liquidity/currency market is volatile which endorses this impression that there is still a genuine demand of US dollars in the national forex market", said S. Nabeel Iqbal, Head of Research & Currency Analyst at Khanani and Khalia. "Given adverse economic developments and record depreciating position of Pak rupee, the native and the foreign investors cannot be restrained from investing through unofficial or irregular medium of exchange trading likewise 'hundi' market. As long as the exchange rate is getting broadened between the interbank and kerb dealings, the trade volume of 'hundi' business will also be exceeded", he added. In the prevalent market situation, the boom in hundi business should not be considered as unprecedented; it is quite natural because of its easily availability and accesses to investors. Analyst term Dubai is one of the "lucrative real estate markets" in the world where investors from emerging economies are frequently moving on to it which is being resulted into a sharp increase in flight of capital from the country.       According to a daily forex report, the Pak rupee continued to register losses versus dollar in the kerb dealings today amid demand of US currency remained high. The American dollar started off new day's trading at Rs.74.20, posted more gains and was trading at Rs.74.50 at close of markets on Tuesday. Thus, rupee shed 0.30 paisas versus greenback in the open market. Rupee continued to incur losses versus the US dollar in the interbank dealings. The US currency started off new day's trading at Rs.73.25, continued to post gains and was changing hands at Rs.73.60 at close of markets on Tuesday. Thus, rupee lost another 0.35 paisas versus dollar in the dealings. Moreover, depleting foreign currency reserves, which fell to 10.1591 billion up to August 7, also exerted pressure on the exchange value of the local currency. It is important to note here that over the past three months, the complications on financing of external current account deficit, speculative positions in the domestic foreign exchange market and import demands have been putting enormous pressure on the exchange rate. State Bank had tightened monetary policy further for the first half of FY09 to stabilize national currency as well as curb inflationary pressures in the current fiscal. Opting exchange rate adjustments towards falling rupee against dollars, the central bank had increased discount rates further by 100 bps to 13 percent effective from July 30, 2008 In order to rescue the national currency from free falling, the SBP introduced a number of foreign exchange regulatory laws according to SBP directives; it had suspended forward booking against all types of imports, providing foreign exchange to the dealers for the import of all categories of Furnace oil etc. It is a matter of concern that, the huge number and diversity of players involved make it difficult for even governments to control the direction of the market. The unmatched liquidity and around-the-clock global activity make forex the ideal market for active traders.