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Dollar price in Pakistan rises to Rs 203 as rupee hit all time low

Dollar price in Pakistan rises to Rs 203 as rupee hit all time low

The rupee plunged against the dollar in interbank trade on Tuesday morning, hitting an all-time low of Rs203.45, with analysts blaming oil-related payments and uncertainty over the reinstatement of the International Monetary Fund’s loan facility for the drop.

The greenback gained Rs2.85 against the previous day’s close of Rs200.40, rising to Rs203.45 about 12:30 a.m., according to the Forex Association of Pakistan. (The FAP’s previous session’s closing rate is slightly higher than the State Bank of Pakistan’s official rate of Rs200.06).

Around 12:15 p.m., the dollar was trading at Rs204 on the open market.

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The rupee’s value has taken yet “another dip,” according to Saad Bin Naseer, director of Mettis Global, a web-based financial data and analytics portal, as a result of the currency market being roiled by “decline in [foreign exchange] reserves and oil-related payments,” after it fell by more than Rs2 against the dollar on Monday.

He also stated that the rupee was under pressure due to the scheduled Financial Action Task Force meeting next week.

“All of these factors, together with the uncertainty surrounding the IMF’s restart programme and China’s $2.3 billion refinancing, have pushed the rupee to a new low,”

The FAP’s Malik Bostan predicted that the rupee will stay under pressure until June 30, citing rising inflation as a result of the IMF’s $6 billion programme with Pakistan being delayed, as well as price spikes in fuel, gas, and electricity. He went on to say that this would lead to an increase in interest rates, which would weaken the rupee.

Bostan also connected the rupee’s depreciation to the dollar’s rising in the international market.

He predicted that the dollar’s rising trend will continue in the following days.

The rupee’s slide, according to Tresmark’s head of research, is due to a lack of dollar inflows into the market.

“There are outflows in the market, as well as a scarcity of dollars. The SBP isn’t providing any liquidity either. Swap premiums have also fallen dramatically as a result of banks’ profits from buy-now-sell-forward swaps “she stated “With poor sentiment and no new inflows on the horizon, [the] rupee is expected to weaken even further.”

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

The rupee began rising versus the US dollar on May 27 and continued to do so for five straight sessions, according to data supplied by the State Bank of Pakistan. 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 reprieve after the government raised petroleum prices by a whopping Rs30 per litre, paving the door for the release of a $1 billion tranche from the International Monetary Fund. Following that, the greenback had lost Rs2.25 in a single session, bringing the total loss to Rs2.25 in a single session.

Currency dealers said the dollar’s comeback on June 3 after losing ground against the rupee for five days was only temporary, blaming it on oil price shocks that would raise inflation.

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

RELATED: Dollar price in Pakistan rises by Rs2.25, crosses Rs 200 mark

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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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