Dollar touches highest ever mark at Rs168.9

LAHORE: The value of the dollar reached an alltime high against the rupee on Tuesday, reaching Rs168.9 in the interbank market.

According to an update posted at 11:39am on Mettis Global, a web-based financial data and analytics portal, the rupee slipped by 80 paisa against the dollar on Tuesday morning, continuing its losing streak against the greenback. The update said the dollar was being traded at Rs168.9 at 11:41 am, compared to the previous day's close of Rs168.09.

Meanwhile, the greenback appreciated 70 paisa against the rupee in the open market and was being traded at Rs169.7. The highest value of the dollar against the rupee was last recorded at Rs168.43 on August 26 last year. The dollar had hit a 13-month high on September 10, 2021, when it reached close to the record high and was traded at Rs168.02.

Since May this year, the dollar has been rapidly marching towards its peak value attained in August 2020 after foreign investments, including hot money invested in domestic bonds, started flying back to their destinations amid the pandemic impact, which began from the middle of March 2020.

However, the current situation is different from the previous episodes of increase in the dollar's value because the foreign exchange reserves of the country are at their peak. The rising import bill played a key role. However, the fear of higher current account deficit in FY22 is also a strong force convincing the buyers to book more dollars for future imports. The widening trade gap is creating fear among importers that the exchange rate would further support the greenback against the local currency.

According to Zafar Paracha, secretary general of the Exchange Companies Association of Pakistan, the value of the dollar has been rising because of an increase in the purchase of the currency by importers and the smuggling of the greenback to Afghanistan.