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.