The US dollar continued to trade at Rs139.2 against the rupee in the open market on Monday morning.
The greenback is hovering at this level for two weeks now, an indication that it has achieved stability after keeping buyers and sellers on their toes throughout 2018, one of the most volatile years in terms of exchange rate fluctuations.
Since hitting its all-time high of Rs140.3 in November, the dollar has been trading below that mark for three weeks and showed no major fluctuations unlike the rest of the year.
Last year, the dollar appreciated by Rs4 or more in one day at least on five occasions and fell by as much during intra-day trade only once. Overall, the dollar’s rate has appreciated 27% against the rupee, witnessing two of its biggest ever single day jumps in the short span of one-and-a-half months.
Market analysts say the dollar may go further up in case of a further delay in availing a loan from the International Monetary Fund to increase our dollar reserves. At the end of 2018, the central bank’s foreign exchange reserves fell by $170 as it held $7.28 billion to finish the year. This is barely enough to pay for two months of our imports and is therefore not sustainable. The shortage of dollars will keep the rupee under pressure, experts say.
The Saudi government has already dispatched $2 billion in cash support to Islamabad and likely to transfer another $1 billion this month while UAE has also pledged $3 billion in aid without specifying the timeline for transferring the payment. There were reports of China being willing to provide a similar aid package soon.
These dollars may provide support through June 2019, but the country needs more than that to avert the balance of payment crisis, experts say.
Prior to the recent increases, some analysts predicted the dollar would cross the Rs140 level and a few even said it might touch Rs150 by June 2019.