KARACHI: The value of the US dollar hit an all-time high of Rs128.26 in theinterbank market on Monday, according to forex dealers.
The US dollar rose by Rs6.75 in the interbank market today, the forexdealers said.
As the market opened, the rate of dollar soared to a high of Rs126, thenwent to Rs125.50 before rising once again to Rs127.50 and then furtherspiking to Rs128.26.
In the open market, the US dollar rose by Rs4 taking the rate to Rs128.20.
At the close of business on Friday, the rate of dollar closed on Rs121.54in interbank foreign exchange market.
When contacted by Reuters, a central bank spokesperson attributed therupee’s decline to market forces.
“Market forces are driving the exchange rate,” Abid Qamar, the central bankspokesperson, told Reuters via text message.
The benchmark KSE-100 Index lost 450 points and was below 40,000 points inthe first half of trading.
The benchmark index is currently at 39,821 points.
Pakistan’s economic fundamentals have deteriorated ahead of the July 25general election, with most financial analysts expecting the nextgovernment will need to seek a post-election bailout from the InternationalMonetary Fund (IMF).
Pakistan’s current account balance has been widening sharply, while foreigncurrency reserves have plummeted over the past few year
On June 14, the rate of dollar closed on Rs121.39. Dollar rose to Rs1during that day and also witnessed a sharp increase to Rs122 at one point.
Further on June 11, the US dollar closed at Rs119.84, after reaching arecord high of Rs121 earlier that day.
Increasing imports and a widening current account deficit were cited as thepossible reasons for the hike in the value of the foreign currency.link>link>
Despite the continued growth in exports (13.3 percent in Jul-Apr FY18) andsome uptick in remittances, growing imports have pushed the current accountdeficit to US$ 14.0 billion during the first ten months of FY18, which is1.5 times the level of deficit realised during the same period last year,SBP said.
The bank said this market-driven adjustment in the exchange rate along withother recent policy measures are expected to contain the imbalances in theexternal account, thereby containing aggregate demand and also facilitatingthe prospects for generating non-debt creating inflows.
In March, the US dollar shot up by Rs4.93 in the inter-bank market to hit ahigh of Rs115.5 before coming down to Rs115 at the close of business.
Since December, the rupee has depreciated by about 14 per cent.