The US dollar continued to extend gains on Friday as it closed above Rs208 in the interbank market by close — a trend analysts attributed to a delay in the deal with International Monetary Fund (IMF) and rapidly depleting foreign exchange reserves.
According to the Forex Association of Pakistan (FAP), the greenback appreciated by 85 paisa from yesterday’s close of Rs207.75 and rose to Rs208.60. It was Rs209.50 in the open market as of 4:45pm.
The currency had appreciated by Rs1.45 on Thursday.
The rupee has been consistently losing ground since the week began which has worried investors and is creating frustration among the stakeholders of the economy.
Malik Bostan, chairman of the Forex Trade Association, outlined three main reasons for the pressure on the rupee: the stalled IMF deal, weakening reserves and delay in the rollover of funds worth $2.5 billion from China.
He said that money sent by overseas Pakistanis has declined by $50 million in the last few months.
He also said the increased demand for foreign currency could be due to vacationing Pakistanis. “The government should stop people from going abroad for vacations because that increases the demand for foreign currency in the market.”
Bostan further stated that the soaring global oil prices posed a danger to the rupee and suggested measures put in place to reduce fuel consumption. He added that this could be achieved by imposing a fuel quota on gas-guzzling vehicles.
