Dollar crosses Rs190 to create new all-time high

Published May 11, 2022
A file photo of a person holding US dollar bills. — AFP/File
A file photo of a person holding US dollar bills. — AFP/File

The US dollar on Wednesday reached an all-time high against the rupee, soaring to Rs190.90 in the interbank market before settling at Rs190.02 at the day's end.

The greenback appreciated by Rs1.36 at the market's close, surpassing Tuesday’s close of Rs188.66. The last time the dollar reached an all-time high was on April 1, when it crossed the Rs189 mark.

In the immediate aftermath of the change in government on April 11, it had gone down but the correction soon ran out of steam and now the greenback is soaring again, reaching a new all-time peak.

The rupee is under pressure due to the higher oil import bill and speculation awaiting the Saudi package, Ahsan Mehanti, director of Arif Habib Group told Mettis Global.

General secretary of the Exchange Companies Association of Pakistan, Zafar Paracha, said delays in talks with the International Monetary Fund was putting pressure on foreign reserves.

"We have to pay $10 billion this year. If the programme is not expanded, the rupee could come under a lot of pressure," he warned, urging economic managers to immediately take steps to control the situation.

A Dawn report on Wednesday said the rising exchange rate had rattled the economy.

The rupee had been losing its value mainly because of an uncontrolled rise in imports and a relatively slower pace of growth in exports. This was reflected in the trade deficit, which reached $39 billion in July-April.

Currency dealers said higher demand for dollars was the key reason for the bullish trend in the currency market. Political foot-dragging by the incumbent government on the reversal of fuel and electricity subsidies — a prerequisite for the resumption of the loan programme by the International Monetary Fund — had further eroded the confidence of stakeholders.

Meanwhile, Malik Bostan, chairman of the Forex Association of Pakistan, had also advised the government to reveal the details of the package Pakistan has received from Saudi Arabia to ease the pressure on the rupee.

During Prime Minister Shehbaz Sharif's visit to Saudi Arabia earlier this month, Saudi Crown Prince Mohammed bin Salman had agreed to discuss extending the term of a $3 billion loan to help Pakistan’s new government tide over the prevailing economic crisis.

But so far, no concrete details have come out from these talks.

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