ISLAMABAD: The US dollar continued its upward journey for the sixth consecutive session on Tuesday and breached the Rs196 mark — an all-time high — in interbank trade, mainly due to the country’s depleting foreign exchange reserves and high imports.
The greenback gained Rs1.50 from the previous day’s close of Rs194.60 to climb to Rs196.10 around 11:20am, according to the Forex Association of Pakistan.
This spell of the dollar’s persistent rise against the rupee began on Tuesday last week, when the international currency hit a record high of Rs188.66 and it soared to Rs190.90 on Wednesday, hit Rs192 on Thursday, reached Rs193.10 on Friday and climbed over Rs194 yesterday (Monday).
According to currency dealers, the dollar demand never comes down, which did not allow the local currency to stay at any point.
They say the higher demand for dollars is the key reason for the bullish trend in the currency market. Political foot-dragging by the incumbent government on the reversal of fuel and electricity subsidies — a prerequisite for the resumption of the loan programme by the International Monetary Fund (IMF) — has further eroded the confidence of stakeholders.
Meanwhile, the decline in the rupee is also fuelled by an uncontrolled increase in imports coupled with a relatively slower pace of growth in exports.
The rising oil prices have already doubled the oil import bills, but the overall imports are also at a record high. In April, imports increased by 72pc, leaving no room for the government to improve its external balance.
Moreover, foreign exchange reserves of the central bank have touched $10.3 billion, lowest since June 2020.
