ISLAMABAD: For the first time the dollar-rupee exchange rate has crossed Rs186 record high level today (April 6) in the inter-bank trading amid political turmoil in Pakistan which deepened further with dissolution of National Assembly.
On Wednesday, the exchange rate of dollar vs rupee increased to Rs186 in the inter bank market. In the open market the rupee has devalued to Rs187 against the US dollar.
In the past one month, the value of the US dollar has increased by Rs8.5 or 4.56 percent.
The Pakistani rupee is in a state of free fall against the US dollar for the past one week amid the political crisis, deadlock in talks with International Monetary Fund (IMF) and the widening trade deficit.
According to currency dealers, the demand for the greenback has surged because of ongoing political instability and deteriorating economic conditions in the country.
Widening trade deficit
In the first nine months of the ongoing fiscal year, the trade deficit of Pakistan has widened to $35.4 billion.
According to latest data of the Pakistan Bureau of Statistics, in March, the deficit expanded to $3.45 billion, showing an increase of 12% over February 2022. The mounting import bill and stagnated exports are widening the trade deficit, which is the difference between the value of exports and the value of imports.
During the July 2021 to March 2022, the import bill has increased by 49 percent to $58.7b. However, in the same period, exports stood at $23.3b.
Depleting foreign reserves
Pakistan’s net foreign reserves are depleting at a rapid pace and the country only has enough dollars to cover the imports of two months.
According to the data shared by the State Bank, Pakistan’s liquid foreign reserves stood at $18.55b on March 25. The reserves have depleted by more than $4billion since March 1.
