KARACHI: The rupee remained under pressure as the US dollar appreciated by another 74 paise in the interbank market on Monday.

The State Bank of Pakistan said the dollar settled at Rs286.56 compared to Rs285.82 on May 19.

The gap between open and bank rates further widened to Rs19. The Exchange Companies Association of Pakistan reported the closing price of the dollar at Rs305 compared to Rs301 in the previous session. It shows that the dollar gained Rs4 on Monday.

The rising dollar price gap has created fear among the stakeholders that the exchange rate could face another shock and the local currency would fall to Rs300 in the interbank.

The financial circle believes that the banks are under pressure from the federal government to open letters of credit for imports without taking the SBP into confidence.

The central bank has been trying to minimise imports, reduce the current account deficit and avoid a default-like situation. However, the political government is under intense pressure from the manufacturing and export sectors to allow imports or face a negative economic growth rate.

Published in Dawn, May 23rd, 2023