Business

Dollar Price in Pakistan: Dollar hits record level, rises to Rs 204

Dollar Price in Pakistan: Dollar hits record level, rises to Rs 204

In the interbank market on Monday, the US dollar climbed to a historic high of Rs204 against the rupee, with analysts blaming the rupee’s slide on pending oil-related payments and declining foreign exchange reserves.

According to the Forex Association of Pakistan (FAP), the rupee declined by 1.85 percent versus the dollar, reaching an all-time low of Rs202.35.

The dollar was valued at 203.9 rupees at the close.

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The dollar finished at Rs203.86, according to the State Bank of Pakistan (SBP).

The FAP’s Malik Bostan attributed the rise in the dollar’s value to the payment of oil import bills. He predicted that the rupee would continue to be under pressure until an agreement with the International Monetary Fund (IMF) was reached.

“The targets established for imports and exports in the next fiscal year have a big discrepancy,” Bostan continued, “showing that the market will have to acquire loans next year as well,” he added, adding that “speculation” was also on the rise.

To stabilise the rupee, he urged that the government implement a restriction on forward dollar trade.

The surge in the dollar, according to Zafar Paracha, general secretary of the Exchange Companies Association of Pakistan, is due to foreign companies transferring their earnings out of the nation.

“Exporters are also not bringing foreign exchange into the nation to earn excessive gains, resulting in a disparity in dollar supply and demand,” he stated.

Paracha went on to say that the State Bank of Pakistan (SBP) could ask exporters to return their profits back to Pakistan in order to boost the dollar supply.

While the budget has been submitted, Asad Rizvi, a former Treasury chief at Chase Manhattan Bank, informed Mettis Global — a web-based financial data and analytics platform — that “the fate of the PKR shift would rely on FATF (Financial Action Task Force) & inflow news from IMF.”

The rupee’s recent drop versus the dollar began in June, when the greenback ended a five-day winning streak for the local currency.

According to SBP data, the rupee began to appreciate against the US dollar on May 27 and continued to do so for the next five sessions. The dollar had been steadily rising due to rising imports, dwindling foreign exchange reserves, and uncertainty surrounding the IMF’s $6 billion facility, which has been frozen since April.

The dollar had reached a new high of Rs200 on May 19, and the rupee had only found relief after the government raised petroleum prices by a whopping Rs30 per litre, clearing the door for the release of the dollar.

On June 3, the dollar began to recover. Currency dealers described it as “temporary,” blaming it on oil price shocks that would raise inflation.

They that they expected IMF inflows and that China will reintroduce support for the local currency.

Finance Minister Miftah Ismail also expressed optimism for an IMF settlement and a rollover of a $2.3 billion Chinese loan, which would help the country’s foreign exchange reserves.

The SBP’s foreign exchange reserves fell by $497 million to $9.2 billion in the week ending June 3.

During the week, the SBP announced that the country’s total foreign exchange reserves declined to $15.176 billion, while commercial banks’ holdings were $5.950 billion.

RELATED: USD to PKR – Dollar Rate in Pakistan | 13 June 2022

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Sibtain Ali is a Senior Editor Business at Pakistan Lounge and joined in October 2021. Formerly business editor at a renowned International News website

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