After Eid holidays the US dollar continues to grow, hitting an intraday peak of Rs163.5 on Friday in the interbank market, its highest level in more than a month.

The greenback soared by Rs2.6 in two trading sessions after markets returned after a week-long Eid break for the first time.

The dollar last traded at this point was on April 20. The open market or cash market followed a similar pattern in which the dollar rose Rs1.2 over the day and hit a Rs163 peak.

The dollar remained volatile in March, rising to an all-time high of Rs169 on March 27, until an intervention by central bank brought it down to Rs167 the same day. That sudden rise (a Rs10 leap in a matter of days) was caused primarily by an outflow of hot money parked on the treasury bills in the country.

It put pressure on the dollar reserves and exchange rates as foreign investors take the money out.

However, as part of emergency assistance, the country soon received money from the IMF and other financial institutions to combat the impact of COVID-19, which strengthened our reserves. Since then, the dollar has gone down touching Rs158 on May 4. Barring the high of today, during May it was trading between Rs160 and 161.

As of May, Pakistan had in reserves over $12 billion, enough to pay for three months of imports.