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Dollar hits record high level of 181.30 amid growing political tug of war in Pakistan

Despite a sharp decline in the current account deficit, to $0.50 billion in Feb-2022 against $2.56 billion in Jan-2022, the value of dollar increased further in the inter-bank and open market amid growing political uncertainty in the country.

ISLAMABAD: The value of dollar further increased to a record high of 181.30 against Pakistani currency in the inter-bank today as tug of war between the government and the opposition intensified further.

Despite a sharp decline in the current account deficit, to $0.50 billion in Feb-2022 against $2.56 billion in Jan-2022, the value of dollar increased further in the inter-bank and open market amid growing political uncertainty in the country.

In the open market, the dollar-rupee exchange rate has been fluctuating above 183 rupees today in the absence of a mechanism to keep very low gap between the inter-bank and open market rates of the dollar and other major currencies.

On Friday, acording to data released by the State Bank of Pakistan (SBP), rupee closed at Rs180.57.

Moreover, the looming political crisis and worries about the next tranche of the International Monetary Fund (IMF) loan kept the currency under pressure.

There has been no progress on Pakistan and the IMF’s seventh review talks for the release of the next loan tranche following the breaches committed by the government on different fronts. The IMF showed concerns about the PM’s relief package.

However, Federal Minister for Finance and Revenue Shaukat Tarin claimed that Pakistan and the IMF staff-level agreement would be done this week as the Fund had sought details of the agreement between the Centre and provinces for financing PM’s Relief Package through which diesel, petrol and electricity prices were frozen at the existing level till June 2022.

Contrary to the expectations of the market, the declining current account deficit failed to entice investors and the currency continued to drop to new lows.

Earlier, speaking to Geo.tv, Pakistan-Kuwait Investment Company Head of Research Samiullah Tariq had said that the currency is under pressure due to higher demand because of the commodity prices.

He had said: “The local currency is now showing signs of the impact of the recent commodity price hike witnessed in the international market.”

Javed Mahmood
Written By

I am an experienced writer, analyst, and author. My exposure in English journalism spans more than 28 years. In the past, I have been working with daily The Muslim (Lahore Bureau), daily Business Recorder (Lahore/Islamabad Bureaus), Daily Times, Islamabad, daily The Nation (Lahore and Karachi). With daily The Nation, I have served as Resident Editor, Karachi. Since 2009, I have been working as a Freelance Writer/Editor for American organizations.

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