ISLAMABAD – *Paying for college abroad? Next semester you’ll need a jobbecause the dollar just hit an **all-time high.*

The Pakistani rupee fell to a record low on Monday. It was trading at Rs128against the dollar when this report was published.

A stronger dollar will make everything, from an airline ticket to yourutility bills and college tuition abroad, more expensive. When the dollargoes up against the rupee, every service and commodity paid for in dollarsbecomes expensive.

We import oil and gas for electricity, spare parts for automobiles, scrapfor steel, coal for cement and pesticides for agriculture and pay indollars for all these imports.

The dollar rose to Rs128 in the interbank market on Monday, a 5.3% increasefrom July 13 when it was trading at Rs121.46.

In other words, if you need $60,000 for an MBA program, you will pay anadditional Rs400,000 because of this increase.

Artwork: Muhammad Obair Khan

*Why is dollar going up?*

In January, the dollar was trading at Rs110.7 against one rupee but sincethen it has increased 15.6%, reaching an all-time high of Rs128 on Mondaydue to pressures on the country’s external front. Pakistan’s trade gap haswidened to $37 billion as imports are 2.5 times higher than exports. Thismeans we are consuming more imported items. This is not sustainable in thelong term and leaves the country with fewer dollar reserves to pay forproductive imports like machinery and petroleum that support economicactivity. A stronger dollar would discourage imports of nonessential itemsand help stop the dollar drain.

Because of these external pressures, the incoming government is likely toseek another bailout from IMF to increase dollar reserves. In other words,rupee will remain under pressure in near term as analysts predict thedollar to go further up before settling somewhere around Rs130.