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Dollar rises by 53 paisa at interbank market

US currency sells at Rs169.8 in open market

SAMAA | - Posted: Sep 20, 2021 | Last Updated: 3 months ago
Posted: Sep 20, 2021 | Last Updated: 3 months ago

The value of the US greenback rose by Rs0.53 to Rs168.72 in the interbank trade while its value increase by a rupee to Rs169.8 in the open market.

The increase in dollar rate is spurred by a widening current account deficit which rose by Rs1.1 billion over the previous month. Other factors hurting the value of the Pakistani rupee were the restoration of an International Monetary Fund (IMF) programme and the effects of providing dollars to Afghanistan.

Earlier this month, the State Bank of Pakistan (SBP) had intervened to stabilize the value of rupee against the US dollar. A slight improvement was seen in rupee value, but this value could not be sustained for long.

Over the past two years, rupee has devalued by nearly 3%

The dollar rate, which moved up by as much as Rs16 over the past four months, neared its previous all-time high at Rs168.3 on September 9. On the same day, the open market rate was 168.7. The previous high was Rs168.7 in the interbank in August 2020.

On May 7 this year, the dollar rate was Rs152.4.

At that time analysts had blamed the deterioration in the rupee rate on the high trade deficit.

Pakistan suffered its highest-ever trade deficit of $4.2 billion in August this year and data released by the Pakistan Bureau of Statistics (PBS) showed an increase of 144% over the previous year.

A trade deficit means the country is paying more on goods and services it is buying from around the world than earning by selling our products and services to them.

In August this year, Pakistan’s exports surged by as much as 41% to $2.2 billion against the same period in 2020, but this was barely enough to keep the trade balance in the positive range. This is because we are spending almost three dollars on imports for every dollar earned from exports. The latest data showed that the country’s imports in August were $6.5 billion, up 95% against imports in August 2020.

The difference between interbank and open market rates is that that interbank rate is the rate at which banks trade dollars among each other while open market rates are those at which the general public traded US dollars with money changers.

The difference between selling and buying rates is the commission a bank or money changer charges.     

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