KARACHI: Dollar in the open market traded at Rs119 on Thursday, gaining 60 paisa, as pressure on the rupee kept mounting due to depleting foreign exchange reserves and short supply of the greenback.

The rising dollar rate was expected after the State Bank of Pakistan’s (SBP) decision to make it compulsory to show identity card for transactions of $500 or more through exchange companies. The dealers expressed their dismay over the decision but accepted it over fears that the country might be put on the FATF’s terror-financing grey list.

The SBP also reported that the country spent about half a billion dollar for external debt servicing during the week ended on May 18.

Currency traders said the market is keenly watching the development which is disappointing since the reserves of the central bank have been falling at an alarming rate. They said there was no visible positive result of the two devaluations of local currency against the dollar during the current fiscal year.

In the outgoing week, SBP reserves fell by $479m to $10.32bn while the country’s total foreign exchange reserves stood at $16.652bn.

On the other hand, the holdings of scheduled banks rose by $209m during the outgoing week, taking their reserves to $6.332bn.

Published in Dawn, May 25th, 2018