KARACHI: The local currency fell to another low of Rs194.18 against the US dollar in the interbank market on Monday.

The dollar kept the rupee in its strong clutch during the entire fiscal year FY22, but the last two months proved the worst. The dollar was traded at higher prices but was closed at Rs194.18 with a depreciation of Rs1.65 compared to the previous price of Rs192.53.

Currency dealers said the dollar demand never comes down, which did not allow the local currency to stay at any point.

The rising oil prices have already doubled the oil import bills, but the overall imports are also at a record high. In April, imports increased by 72 per cent, leaving no room for the government to improve its external balance. The foreign exchange reserves of the State Bank of Pakistan, which were at $20.073bn in August FY22, fell to $10.308bn, almost half of the August peak.

Currency dealers in the inter-bank said there was no chance for improvement in the exchange rate. “The dollar will appreciate every day until and unless the government takes some concrete measures to stop this free fall,” said Atif Ahmed, a currency dealer in the interbank market.

The inflows of record remittances and record growth in the exports could not produce positive impact for the help of local currency. Currency dealers said the unexpectedly high imports bill and low foreign investment are not in support of exchange rate while over $13bn current account deficit is already there as challenge for the government.

Published in Dawn, May 17th, 2022