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Today, the Dollar hit an all-time high in Pakistan’s inter-bank trade. That means that the Dollar Price in Pakistan went over 207 PKR, or 207 Pakistani Rupees. Which is equivalent to $1.61 USD at the time of writing this article.
Background information
As per the Forex Association of Pakistan (FAP), In the open market, the exchanging Dollar Price in Pakistan at Rs208.5 today. During the week finished on June 3, fluid unfamiliar trade reserves of the State Bank of Pakistan decreased by $497 million to $9.2 billion. So it seems like increasing the prices of gas, electricity, and petrol were not enough. There are some solid chances of imposition of additional taxes. It was a general idea that the market would remain restless until the IMF bargain closed. On the other hand, a day before that (Wednesday), our government raised fuel costs by up to 29 percent(Rs233.89). Eliminating fuel subsidies trying to manage the monetary shortage and secure basic help from the IMF.
What is dollar rate?
Dollar rate refers to the currency’s buying power compared with that of other currencies, specifically U.S. dollars. An increase in dollar rate is usually because of an upswing in local economic activity. It’s also important to remember that there are many factors influencing exchange rates on any given day—political instability, natural disasters and more—so it can be helpful to look at long-term trends when analyzing dollar rate changes.
What will happen if dollar rate increases further?
If dollar rates continue to increase, it could have negative implications for trade flows and balance of payments dynamics. It would also lead to an increase in commodity prices. Since almost all of our imports are in dollars. The Fed has been raising interest rates and it is expected that at least two more increases will happen before year end. This will put pressure on our economy which is already struggling due to political uncertainty.
How can we stop further increase in dollar rate?
The dollar price is continuously increasing, while it touched a new record of Rs207 per dollar on Monday. The devaluation of rupee against dollar is mainly attributed to its overall strength and high demand for dollars as an investment instrument. So how can we control further increase in dollar rate? What are some effective measures that can be taken by government? Some analysts suggest that government should immediately convert all short-term borrowings into long-term ones.
This will improve liquidity and bring down pressure on interest rates, which would gradually reduce inflationary pressures. In addition, it will help limit volatility in local currency exchange rates with regards to foreign currencies.
Another solution could be that both public and private sector banks should sell their international reserves so as not to fuel demands for more reserves. And you guys can also help in this scenario. You have to limit the consumption of petrol, as well as the imported things for little while. i know that’s although call, but believe me, that is the only way. Don’t think about the government if you don’t like, think about PAKISTAN!
