Dollar continues to rise, reaches record high of Rs173.50 in interbank trade

Published October 20, 2021
The US dollar continued to rise against the rupee on Wednesday and reached a record high of Rs173.50 after appreciating by 55 paisas in the interbank trade. — AFP/File
The US dollar continued to rise against the rupee on Wednesday and reached a record high of Rs173.50 after appreciating by 55 paisas in the interbank trade. — AFP/File

The US dollar continued to rise against the rupee on Wednesday — a trend experts largely attribute to the country's growing current account deficit — reaching a record high of Rs173.50 after appreciating by 55 paisas in interbank trade.

According to the Forex Association of Pakistan (AFP), the buying rate of the greenback was recorded at Rs173.40 and the selling rate at Rs173.50 in the interbank market by the session's end.

The dollar's buying rate in the open market was recorded at Rs173.80 and the selling rate at Rs174.20 at around 4:15 pm, data by the AFP showed.

Zafar Paracha, general secretary of the Exchange Companies Association of Pakistan, explained the persistent depreciation in the value of the rupee against the dollar as a consequence of rising imports.

"The continuous increase in imports is fuelling the dollar's demand in the market," he said, adding that there was a possibility of imports rising to $65 billion by the year's end, up from an earlier estimate of $61bn.

Moreover, he added, the target for remittances from overseas Pakistanis, which was set at $29bn in June earlier this, was likely to be contracted to $28bn.

However, if the approval of a $6bn loan package by the International Monetary Fund and the immediate delivery of $1bn on that account from the Fund could improve the situation, Paracha said.

Commenting on the persistent decline of the rupee against the dollar, Khurram Schehzad, chief executive officer of Alpha Beta Core — an investment firm and strategy advisory platform — said the rupee had plunged by 11 per cent against the dollar over the past six months.

On the other hand, Schehzad said, the value of other currencies in the region had declined by hardly one to two per cent in the last six months.

"This shows that the pressure on the rupee is consistently increasing," he said, stressing the need to devise a strategy on "war-footing" to increase foreign investment in Pakistan so as to stop the upward trajectory of the dollar.

Now you can follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Election time
Updated 27 Jan, 2023

Election time

There are concerns whether the ECP will be sufficiently able to protect the integrity of elections if they are held under partisan governments.
SCO invite
27 Jan, 2023

SCO invite

THOUGH India’s invitation to Pakistan to attend the Shanghai Cooperation Organisation events in Goa later this ...
Call to arms
27 Jan, 2023

Call to arms

ONE way the state abdicates responsibility in Pakistan is by farming out its functions to the private sector. In ...
Nuclear miscalculations
26 Jan, 2023

Nuclear miscalculations

IF the claim of former US secretary of state Mike Pompeo, that Pakistan and India came close to a nuclear exchange...
Exchange rate cap
26 Jan, 2023

Exchange rate cap

THE ‘management’ of the exchange rate by the State Bank, allegedly at the behest of the government, to ward off...
Fawad’s arrest
Updated 26 Jan, 2023

Fawad’s arrest

Does the state really need to fan public discontent in a period as fraught with uncertainty as this?