The rupee’s downward trajectory against the US dollar continued on Thursday as the local currency plunged to Rs187 against the greenback in the interbank market at the start of trading.
The value of the dollar rose by Rs1.30 against the rupee, which had closed at Rs185.92 in the interbank on Wednesday, to reach Rs187.22. In the open market, the dollar was being traded at Rs187.50.
Currency dealer Zafar Paracha said that the demand for the dollar had increased which in turn had put the rupee under pressure.
“There are also external payments [that need to be made] which is why the rupee may continue to come under pressure,” he said.
Malik Bostan, the chairman of the forex association, said the demand for the greenback had soared with the opening of the Letter of Credit for importing oil, thereby putting pressure on the rupee.
“It is hoped the government will succeed in securing economic aid from the International Monetary Fund (IMF) and Saudi Arabia, which will help strengthen the rupee,” he said.
Earlier today, newly appointed Finance Minister Miftah Ismail left for Washington where he is expected to meet IMF officials for the revival of a loan facility that was stalled following the premature end of the Imran Khan government earlier this month.
On Wednesday, the dollar was traded as high at 186 during the day before closing at Rs185.92. The dollar gained Rs1.48 on a day-on-day basis reflecting the increasing weakness of the economy and its representative currency.
Currency dealers didn’t see any chance of rupee’s recovery in the near term saying the persisting political uncertainty was supporting the US dollar which is making sharp gains.
When the dollar climbed to an all-time high on April 7, most currency experts found the exchange rate was going up mostly based on speculation. With the change of government in Islamabad, the dollar plunged to Rs181.5 but it resumed its upward journey and rose to Rs185.92 in just four sessions.
Foreign investors have already stopped investing in the country while the outflows of dollars from commercial banks’ accounts were also noted in March.