KARACHI, Jan 4: The US dollar further gained against the weakening rupee reaching the six-year lowest level, reflecting signs of poor health of economy and rising demand of the greenback.

The local currency lost 25 paisas against dollar on Friday. Dealers identified a number of reasons for the recent poor performance of rupee, but were firm that higher demand at the end of the calendar year was the main factor.

Foreign stake-holders of companies operating in Pakistan have to pay their annual dues, while the end of year generally demands clearance of all dues before beginning of each year, they said.

Dealers said the thrust for dollar was so high that even State Bank was unable to stop the upward movement of the US currency.

Despite all efforts by the State Bank to keep the dollar in a given ‘bracket’ for which the bank uses its influence, the rupee kept moving downward while more decline is expected in the coming days, said foreign exchange dealers.

The rupee reached 62.22 against a dollar on Friday, making importers more panicky as they feared that a further hike in dollar value could add significant cost to their imports.

Dealers said the $100 per barrel oil price was another factor which influenced the exchange market forcing importers to take a cautious approach and book the US currency at future rates.

Pakistan’s foreign exchange reserves are no more rising, rather these have started melting. The reserves were hurt by the oil payment as the State Bank still pays over 70 per cent oil bills.

Dealers aid the outflow of dollar from the shares market, rising reverse remittances and lower foreign direct investment, could further impact the rupee negatively.

“The SBP has been influencing market, directing the dealers to remain within the limit set by the SBP, but the pressure was so high that it broke all barriers,” said a dealer.

Although the State Bank denies its involvement in the exchange market, dealers were habitual of receiving instructions from the SBP officials regarding the dollar-rupee parity.

Inflow of dollars through remittances have increased, but the foreign direct investment and portfolio investment have been sliding downward.