KARACHI: Amid mounting geopolitical tensions, the rupee plunged to an all-time low against the US dollar at Rs179.22 in the interbank market on Tuesday.
The currency dealers said the demand for greenbacks was high despite falling oil prices on the international market. The dollar gained up to 25 paisa against the rupee on Tuesday. The dollar was slightly lower in the State Bank’s quoted prices compared to prices issued by the Exchange Companies Association of Pakistan.
The dollar was traded in the range of Rs179.22 to Rs179.30. Market experts said the dollar would maintain a bullish trend due to high oil prices and a subsequent increase in the import bill.
“If the State Bank of Pakistan sets the exchange rate free in the interbank, the dollar will immediately go beyond Rs180 within a day to two,” said a currency dealer of a large bank.
The SBP has been influencing the interbank market to defuse the tendency for a sudden increase in the dollar prices while it allows gradual appreciation of the dollar against the rupee.
The latest data showed that the SBP reserves slipped to $16.212bn in March compared to $20.073bn in August 2021.
The higher inflows through remittances and increased export proceeds during the current fiscal year supported the exchange rate but it could not stop the rupee from day-to-day depreciation.
Published in Dawn, March 16th, 2022