The US dollar continued to surge in the interbank market Wednesday, touching Rs168.2 for the first time in more than two weeks.
The greenback rose by 58 paisas in the interbank market, translating into an increase of Rs1.2 in three trading sessions since markets opened after the Eid break.
The central bank said on July 30 that its dollar reserves stood at $11.9 billion, while those held by commercial banks at $6.9 billion.
The country has a total of $18.9 billion in liquid foreign reserves.
On March 27, dollar rose to an all-time high of Rs169 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 parked in the country’s treasury bills.
As foreign investors took the money out, it put pressure on our dollar reserves and exchange rate.
However, the country soon received money from the International Monetary Fund and other financial institutions as part of an emergency support to fight the COVID-19 pandemic. The financial assistance stabilised the dollar reserves as well as the exchange rate.