Dollar breaks all past record, soars to all-time high of Rs210
The US dollar climbed above Rs210 in the interbank market on Monday morning, reaching a new all-time high and breaking its last trading day’s record which breached the Rs207 mark.
According to the Forex Association of Pakistan, the rupee depreciated sharply by Rs2.55 and closed at Rs207.75 on Friday. The dollar was trading at Rs212 in the open market at 10:30am in the morning.
Saeed bin Naseer, director of financial data and analytics portal Mets Global, said that the rupee was under pressure on the first day of the week due to reports of dollar depreciation in banks at the end of last week.
He pointed out that the shortage of the dollar in the banks resulted in low or negative sweep premiums as the country’s foreign exchange reserves continued to dwindle.
Saeed bin Nasir added that the announcement by the IMF on the resumption of the loan program or the renewal of remittances from China could help stabilize the exchange rate.
According to Mets Global, the rupee lost Rs6.4 during last five consecutive sessions.
Meanwhile, Zafar Paracha, General Secretary, Exchange Companies Association of Pakistan, said that the market is in a deep slump but the authorities seem to be unaware of it. There is a lack of value because no one cares and there is silence everywhere.
He warned that if this trend continues, Pakistan could go bankrupt like Sri Lanka, it is imperative for the government to take steps otherwise the country will default.
In a weekly review earlier today, local financial portal Trace Mark said the rupee’s depreciation has been exacerbated by low levels of foreign exchange reserves.
According to the SBP, Pakistan’s reserves have further declined by $234 million to less than $15 billion, with the central bank’s share in these reserves being less than $9 billion.