KARACHI: The US dollar further appreciated to set a new record against the local currency on Wednesday, reflecting that nothing could stop the bullish dollar from moving ahead despite fresh $3 billion inflow from Saudi Arabia.
Currency dealers in the inter-bank market traded the dollar under high demand at a price never witnessed before. The dollar gained 64 paisa against the rupee to reach Rs177.44 at closing on Wednesday.
The US dollar has appreciated by 14.17 per cent since May and 11.21pc during the current fiscal year.
Bankers said the exchange rate did not accept the positive impact of the $3bn inflow from the Saudi government meant to keep it in the account of the State Bank of Pakistan. It has improved the foreign exchange reserves of the SBP but failed to prevent the rupee’s decline against the dollar.
Currency experts said that initially successful negotiations with the International Monetary Fund (IMF) should have an impact on the exchange rate but the rising demand for dollars had neutralised the positive impact on the local currency.
Moreover, both the prolonged negotiations with the IMF and $3bn inflow from Saudi Arabia also came under criticism. Tough the government did not announce the conditions attached with the IMF deal and Saudi assistance, harsh criticism coupled with negative information disputed both and the exchange rate remained in favour of the US dollar.
“The import bill of $7.5bn in November is enough to tell the whole story about the dollar demand and exchange rate. The dollar will continue to press the local currency unless something magic happens,” said Atif Ahmed, a currency dealer in the inter-bank market.
Bankers were not sure about the future trend of the exchange rate but said it might stop with the higher inflows of remittances, increased exports and a big cut in the import bill.
Adviser to the Prime Minister on Finance Shaukat Tarin recently said the global high prices of commodities would come down next year and this would reduce the import bill.
The dollar traded at Rs179 in the open market which looks nightmare for the people willing to buy dollars for Umrah, travelling, education or health.
However, exchange companies said the dollar buying had hit rock bottom mainly due to the involvement of government agencies in locating the buyers as well as the sellers. They said the volume of open market these days was not more than 10 per cent compared to what it was in normal trading days.
Published in Dawn, December 9th, 2021