US Dollar Skyrockets To Rs194 Breaking All The Previous Records
On Monday, the dollar climbed beyond Rs194 versus the rupee in the money markets, as experts expressed concern about the country's mounting import bill.
The dollar gained Rs1.30 from Friday’s closing in interbank trade to reach Rs194.30 at about 11:30 a.m., as per the Forex Association of Pakistan (FAP).
This comes after the rupee fell to fresh lows last week, owing to the country’s mounting import bill.
The dollar had skyrocketed to historic highs against the rupee for the past 5 days, according to FAP data, with the world reserve currency reaching its peak of Rs188.66 in the central bank last Tuesday, then surging to Rs190.90 on Wednesday, passing Rs192 on Thursday, and approaching Rs193.10 on Friday.
According to FAP estimates, the dollar ended Friday’s session at Rs193. The dollar, on the other hand, ended the day at Rs192.53, according to statistics supplied by the State Bank of Pakistan (SBP).
According to a report published by Dawn, the rupee has dropped 18.17 per cent of its value versus the dollar since the fiscal year began on July 1, 2021.
The rupee’s depreciation is mostly due to an out-of-control surge in imports and a slower rate of development in exports. The trade imbalance hit $39 billion in July-April, reflecting this.
Meanwhile, the central bank’s foreign exchange holdings have fallen to $10.3 billion, the lowest level since June 2020. The import cover, which indicates a country’s capacity to pay for overseas goods in international currency, has dropped to a pitiful 1.54 months.
The main reason for the currency market’s optimistic trend, according to currency traders, is the increasing demand for dollars. The current government’s political stalling on the removal of gasoline and energy subsidies, which is a need for the International Monetary Fund (IMF) to resume its loan programme, has further damaged stakeholders’ trust.
The currency might remain under pressure until the IMF lending programme is extended, according to Zafar Paracha, General Secretary of the Exchange Companies Association of Pakistan.
He also requested the Pakistani government and SBP to quickly impose import restrictions on non-essential products and promote alternative fuels. He attributed these actions to the country’s import tariff being reduced.
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