KARACHI: The rising rupee finally brought the US dollar below the Rs100 mark on Tuesday, setting a new record for the currency’s depreciation in the country.

Currency dealers said the dollar was traded as low as Rs99.90 in the inter-bank market. Market experts forecast more depreciation of the US currency in the coming days.

The dollar also dipped below Rs100 in the open market. The figures released by the Exchange Companies Association of Pakistan showed the dollar was traded at Rs99.70-90.

The finance minister had declared recently that he would bring back the dollar at Rs98. The market had laughed off the claim as fanciful, but it is now very much in the realm of probability.

Currency dealers and experts have no idea how long the declining trend would last and where the greenback would finally stabilise.

“If the exchange rate settles below Rs98, it will create serious problems for exporters. They are already crying over the losses they have to face due to the sudden fall in dollar’s value,” a banker said.

However, some currency dealers who support the devaluation said the exchange rate might fall below Rs98.

“If the government does not interfere and no extra effort is made to stop the decline, the exchange rate may settle at Rs92,” said Malik Bostan, Chairman of ECAP.

Experts reviewed the possibilities of further decline while they believe the government would not encourage the dollar deprecation below Rs98, particularly in the wake of strong reservations being shown by exporters.

Analysts said the dollar supply in the inter-bank market would see a drop in the inter-bank since exporters had been selling out their holdings, the only increased supply will be remittances of overseas Pakistanis.

“Remittances are 11 per cent higher than last year, but it is not enough to keep the US dollar under pressure. The biggest element is continued panic in the market which has set a declining trend. It will go away once the panic is over and the government can do it,” said Atif Ahmed, a currency dealer and expert in inter-bank market.

“I know that the State Bank is being persuaded to buy dollars being kept under FE-25 accounts by Pakistanis. If it happens it will stop the decline,” said Bostan. He said resident Pakistanis apprehend massive erosion in the value of their savings since they maintain dollar accounts under FE-25 scheme.