The US Dollar continued its surge against the rupee on Wednesday, rising to a historic high of Rs170 in the interbank market.
The dollar was up 31 paisa in the interbank market and trading at around Rs170.27.
In the open market, it was up by 50 paisa and trading at around Rs172.30.
The rupee, which has been termed the worst-performing currency in Asia, seems to have opened the field for the bullish US dollar to move forward unchecked and erode the remaining value of the local currency.
The currency has been losing purchasing power fast in the domestic market as well, causing inflation that has badly hit the general public.
On August 26, 2020, the dollar hit Rs168.43. Then it started declining and reached Rs151.83 on May 14, 2021. However, the greenback started rising and has appreciated by 6.6 per cent and 9.9pc since June and May 14, 2021, respectively.
The State Bank of Pakistan (SBP) had indicated earlier that the dollar could appreciate during the current financial year due to an expected higher current account deficit.
Last week, the central bank amended the prudential regulations to slow down speedy growth in imports which swelled to over $6 billion in August alone.
The SBP said the targeted step would help moderate demand growth in the economy, leading to slower import growth and thus supporting the balance of payments.
Currency dealers fear that the balance of payments could see a reverse trend as in the first two months (July-August) of FY22 the country recorded a current account deficit (CAD) of $2.29bn against $1.8bn in entire FY21 dipping from an all-time high of $20bn in FY18.