Dollar continues upward journey

Updated Jun 03 2020

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Currency dealers cite multiple reasons for pressure on exchange rate including government’s growing forex needs. ⁠— AFP/File
Currency dealers cite multiple reasons for pressure on exchange rate including government’s growing forex needs. ⁠— AFP/File

KARACHI: The dollar continued its upward journey against the local currency, raising the uncertainty for the exchange rate and importers.

On Tuesday, the dollar was traded as high as Rs166 in the interbank market but fell back to close at Rs164.89 with a gain of 81 paisas.

Currency dealers said the pressure on the exchange rate was due to multiple reasons, including the government’s growing forex needs to meet its external obligations.

The local currency has been under pressure for the last four sessions despite the fact the dollar itself has been losing against international currencies like the euro and pound.

Bankers said the demand from importers is not exceptionally high but there are concerns that the country might face shortage of dollars due to pandemic, which has hit the exports hard.

According to dealers, the chances for deferment of bilateral debt servicing for one year by G20 look bright but they see low remittances in coming months and a nosedive of foreign investment in the next fiscal year.

After Ramazan, the greenback has gained about Rs4 against the rupee in the interbank market.

In the open market, which follows the interbank and is currently facing no extra demand, the dollar traded at Rs165.20.

Published in Dawn, June 3rd, 2020