Dollar touches record high of Rs271.36

KARACHI: The dollar continued to make gains on Thursday and reached a new record high of Rs271.36 at the closing of the interbank foreign exchange market, dealers said.

The rupee lost Rs2.53 to close at Rs271.36 against the greenback from the previous day’s closing of Rs268.83 in the interbank foreign exchange market.

Previously, the rupee made an all-time low of 269.63 on January 30, 2023.

The dealers said the depleting foreign exchange reserves and the harsh International Monetary Fund (IMF) conditions pressured the local currency.

Besides, the government kept the dollar under control during the last five months, which adversely affected the exchange rate. However, since the government let the market forces determine the value, the rupee fell sharply against the greenback.

The government’s intention to cap the dollar rate adversely affected the inflows, especially the workers remittances and export receipts. Besides, huge losses in the shape of outflows due to uncertain exchange rate and a fall in the confidence of the foreign investors.

Despite the efforts to control the exchange rate and curbing the demand at home, the import bill fell 23 per cent to $31 billion during July-December of the fiscal year 2022/23, compared with $40.56 billion in the corresponding period of the last fiscal year.

On the flip side, exports also recorded a decline of 6 per cent to $14.26 billion during the period under review, compared with $15.12 billion in the same period of the last fiscal year.

Meanwhile, the inflows of workers remittances also declined 11 per cent in the first half (July-December) of the fiscal year 2022/23. The State Bank of Pakistan (SBP) received $14.05 billion during the first half of the current fiscal year, compared with an inflow of $15.81 billion in the corresponding half of the last fiscal year.

The exchange rate outlook is bleak, as the official foreign exchange reserves fell to around a nine-month low.

The official foreign exchange reserves of the SBP fell sharply to only $3.68 billion by the week ended January 20, 2023, compared with $4.601 billion on January 13, 2023.

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