Dollar increases another Rs1.97 after halting slide

KARACHI, Oct 18 (SABAH): The US dollar was available for Rs279 in early inter-bank trading on Wednesday as the greenback made another Rs1.97 gain against the local currency after losing streak that lasted well over a month.

With the rupee maintaining the surge against the dollar, the official exchange rate for dollar had closed at Rs277.03 on Tuesday after the greenback recorded a 20 paisa increase after a string of losses which saw the rupee making a recovery from the historic low of Rs307.10 – representing a net gain of Rs30.30.

Meanwhile, the open market on Wednesday saw the dollar surging by Rs2.50 and being traded for Rs280

One has to see whether the rupee has lost the steam resulting in a renewed surge of dollar for which the demand is increasing amid the upcoming review of the IMF deal that may result in stricter adherence to the conditions, such as increase in gas prices.

Any further increase in utilities’ rates will further fuel inflation and boost cost of doing business as well as imports bill, thus killing the hopes of economic revival due to a relatively stronger rupee.

Record-high inflation and interest rates are the reasons behind the economic crisis Pakistan has been facing, simultaneously resulting in rising cost of living and cost of doing business, thus crippling the country’s economy.

Although Pakistan is facing a severe economic crisis, the record depreciation experienced by rupee was a product of market manipulation – hoarding, illegal trading and cross-border smuggling – and the government has launched a successful crackdown on the elements involved in these practices.