KARACHI: The exchange rate ended unchanged on Thursday, as the dollar maintained the record high level of Rs177.98, which was the previous day’s closing at the interbank foreign exchange market, dealers said.

They said the market witnessed high dollar demand for import and corporate payments; however, the banks provided sufficient dollars against the demand to keep the rupee value maintained at the previous level.

The local currency witnessed the latest lowest level; following the announcement of the monetary policy where the central bank raised the policy rate by another 100 basis points to support it.

The State Bank of Pakistan (SBP) on December 14, 2021 announced another 100 basis points increase in the key policy rate to 9.75 per cent. It was the third straight increase in the policy rate by the central bank since September 2021 and the second in a span of less than a month.

The primary objective of the central bank is to dampen inflation by discouraging demand. Same was done by the SBP in the previous policy announcement on November 19, 2021. However, the free-fall in the rupee continued due to higher dollar demand for import payments.

According to the official data of the Pakistan Bureau of Statistics (PBS), the import bill of the country surged 69.17 per cent to $33 billion during the first five months (July-November) 2021/22, compared with $19.47 billion in the corresponding months of the last fiscal year.

Similarly, the trade deficit during the months under review widened 112 per cent to $20.59 billion, compared with the deficit of $9.72 billion in the corresponding period of the last fiscal year.

To support the rupee, the government is considering measures to curtail imports. The dealers said the government should take concrete steps to discourage imports of luxury and non-essential items.

The rupee remained under pressure since the start of the current fiscal year. It fell Rs20.44, or 12.97 per cent, from June 30, 2021 closing of Rs157.54 to the closing of Rs177.98 on December 16, 2021.

However, in the open market, the buying and selling of the dollar was recorded at Rs180.20/Rs181.40 at 3:30pm PST.

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