KARACHI: The US dollar continued its upward drive for the second consecutive day against the rupee and gained another Rs1.05 to Rs207.99 in the interbank market on Wednesday.

The dollar has absolute domination in the currency market but the inflow of $2.3bn from China on June 23 changed the scenario as the rupee recovered Rs4.70 in a single session to Rs207.23 from Rs211.93.

The currency market believes that the announcement of a new subsidy scheme by the Punjab chief minister to provide free electricity to 9 million households using up to 100 units a month has faded the hopes for an early release of the IMF tranche.

Market experts think the higher interest rate would further devalue the local currency. The State Bank of Pakistan is scheduled to announce its monetary policy for the next two months on Thursday. Most of the stakeholders expect 100 to 150 basis points hike in the interest rate.

The greenback price in the open market jumped by Rs2 to Rs209.50.

Published in Dawn, July 7th, 2022