The US dollar reached Rs162.3, its highest level in more than a month, in the interbank market on the first trading session as markets opened for the first time after Eid vacations, according to the rates shared by Foreign Exchange Association Pakistan.
During the day’s trade, the greenback surged Rs1.4 from its closing rates of the last working day before Eid and reached a five-week high before falling back to close at Rs161.8 on Thursday. The last time dollar traded above Rs162 was on April 21.
The open market or cash market followed similar trend where dollar rose 80 paisa during the day and reached a high of Rs161.8.
In March, the dollar remained volatile, rising to an all-time high of Rs169 on 27th before a central bank intervention brought it down to Rs167 the same day. That sudden rise (a jump Rs10 in a matter of days) was primarily caused by an outflow of hot money that was parked in the country’s treasury bills. As foreign investors took the money out, it put pressure on our dollar reserves and exchange rates.
However, the country soon received money from the IMF and other financial institutions as part of emergency support to fight the impact of Covid-19, which stabilized our reserves. The dollar has been falling since then, hitting Rs158 on May 4. Barring today’s high, it has traded between Rs160 and 161 during May.
As on May, Pakistan had more than $12 billion in its reserves, enough to pay for three months of import bill.