KARACHI, Jan 13: The rupee will remain under pressure against the US dollar in the coming weeks due to burgeoning trade deficit and higher demand for the greenback, said currency experts.

The trade deficit reached to record $6.450 billion during the first half of the current fiscal and could touch $13 billion-mark by the end of the year, they added.

“The more the trade deficit widens the more we need dollars to bridge the gap and this will create higher demand for the greenback,” said Amir Abbasi, an importer of synthetic fibres.

Importers said that lower export proceeds were compelling them to cover their positions at the earliest and they were booking dollars as much as possible even at higher rates.“The importers cannot afford to see further hike in the dollar value as higher demand actually pushes up the dollar rates in the market,” Mr Abassi said.

Though the devaluation supports exporters to earn more money but at the same time it hurts the domestic export-oriented industry as the costly imported components have large share in the exportable products.

An official study shows that export consists of 37 per cent of the imported components which is fairly higher.

Currency dealers said the market could witness higher demand of dollars during February and March and the rupee was likely to lose another 50 paisa against the greenback.

“Though the dollar is mostly being traded at Rs60.96 to Rs61.97 in the inter-bank market and there is a possibility that the US unit may gain another 5 to 10 paisa against the rupee,” said Khadim Ali, a currency dealer.

He said the State Bank’s pressure tactics to keep strong hold on dollar demand was the key to keep the dollar within Rs61 limit.

“Once the SBP eases its grip over the currency mechanism, the dollar will immediately earn more value against the rupee,” he said.

The SBP denies that it controls the dollar value, but the market players say the influence of the SBP has been significant for last five years. The SBP uses large banks to buy and sell the dollar on its behalf to keep the rupee-dollar exchange parity within the desired limit.

“Despite these pressures from the SBP, I believe that dollar will see more value in the coming months which is also obvious from the strong US job data of last month,” Mr Khadim added.

Experts said that the country’s strong foreign exchange reserves ($12.9bn) had been losing its pressure on the dollar value mainly because of record high imports.