Dollar Ascends To New High Of Rs 128 In Open Market

News Desk , Bol News

12:49:52, Friday, July 20, 2018

The US dollar reached a record high of Rs 128 in the open market on Friday.

It gained a further Rs 0.30 as it continued its climb against the Pakistani rupee, currency dealers said.

Earlier in this week , dollar reached to Rs 129 in the open market , as a result, rupee weakens in the market.  

Since December, the rupee has progressively shed over 21% of its value after the State Bank of Pakistan reportedly restrained from intervening in response to the pressure exerted by a widening current account deficit.

Pakistan’s current account balance has been widening sharply, while foreign currency reserves have plummeted over the past few years.

The country’s economic fundamentals have deteriorated ahead of the July 25 general election, with most financial analysts expecting the next government will need to seek a post-election bailout from the International Monetary Fund. 

Prior To this, on July 16, Forex dealers told that the value of the US dollar increased to record high of Rs 128.26 in the Interbank market. 

Furthermore, forex dealers reported that the value of US dollar increased Rs 6.75 in the Interbank market.

At the close of business on Friday, the rate of dollar closed on Rs 121.54 in Interbank foreign exchange market.

Moreover, on June 14, the rate of dollar closed on Rs 121.39. Dollar rose to Rs 1 during that day and also witnessed a sharp increase to Rs 122 at one point.

Increasing imports and a widening current account deficit were cited as the possible reasons for the hike in the value of the foreign currency.

The State bank of Pakistan said that despite the continued growth in exports (13.3 percent in Jul-Apr FY18) and some uptick in remittances, growing imports have pushed the current account deficit to US$ 14.0 billion during the first ten months of FY18, which is 1.5 times the level of deficit realised during the same period last year. 

The bank further stated that this market-driven adjustment in the exchange rate along with other recent policy measures are expected to contain the imbalances in the external account, thereby containing aggregate demand and also facilitating the prospects for generating non-debt creating inflows.

The rupee has depreciated by about 14 per cent since December.

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