The US dollar continued its rising streak against the rupee on Wednesday, rising past Rs199 in interbank trading and marking the completion of a week of breaking records, largely on account of the country’s rising imports and depleting foreign reserves.
According to the Forex Association of Pakistan, the greenback gained Rs2.75 from the previous day’s close of Rs196.50 and climbed to Rs199.25 around 1:30pm before closing at Rs199, a gain of Rs2.50.
In the open market, the US currency was being traded at Rs200.50 around 4pm.
The current spell of the dollar’s persistent rise against the rupee began on Tuesday last week, when the international currency hit a record high of Rs188.66. It then soared to Rs190.90 on Wednesday, rose past Rs192 on Thursday, reached Rs193.10 on Friday, climbed over Rs194 on Monday and surged past Rs196 Tuesday.
Asad Rizvi, former treasury head-chase of Manhattan Bank, told Mettis Global on Tuesday that “even persistent inflow of record remittances is not helping” in containing the dollar’s flight.
“Depleting forex reserves, inflow delay and quieter State Bank of Pakistan are giving jitters to the market. But surging oil prices beyond $110 is disastrous,” the Mettis Global report quoted him as saying.
With the dollar rising to uncharted heights, stakeholders warn that a weakening rupee could open up Pakistanis to a second round of inflationary impact, which will hit the lower and middle classes the hardest.
Experts believe that while no sector of the economy would be immune to the fallout from the rupee’s steep devaluation, key areas such as debt servicing and imports for industry and food items will be among the first to be affected.
