The price of the dollar in Pakistan has surged Rs0.70 to hit a 12-month high of Rs167.30. The last time dollar was at this level was on August 27, 2020.
The dollar started to take off on August 24 when it rose by 90 paisas to reach Rs165.40. The very next day, it increased by another 40 paisas to Rs165.80.
This was followed by another Rs0.70 rise to Rs166.50 on August 25. In the following two days, there was another increase of Rs0.50, making for a Rs2.10 leap in just six days.
According to people associated with the Forex market, the main reason for the rise in the dollar rate in Pakistan today is the increase in import bills.
Forex association chairman Malik Bostan said that the quantity of imports has been rising. Just last month, a 45% increase in imports was reported. He said importers are buying the dollar in large quantities.
Forex dealer Zafar Paracha said oil imports have increased as the economy opens up, putting pressure on the dollar.
Also read: Depreciating rupee against dollar didn’t increase exports for Pakistan: study
According to forex dealers, there are fears in Pakistan over a renewal of terrorism, and tension over the change of government in Afghanistan, which has increased dollar buying. The unstable security conditions in the neighboring country after the bomb blasts in its capital Kabul, also impacted dollar rates.
Bostan said that the decision to freeze the US accounts of Afghanistan and its banking system problems could have a spillover effect on Pakistan as well, due to which dollars are being held.
According to Zafar Paracha, dollar smuggling to Afghanistan is also a reason for the rise in its value.
Malik Bostan explained that currency is smuggled from the Pak-Afghan border and the government’s policy which allows travelers to carry $10,000 to Afghanistan, is abused. The government should reduce this limit from $10,000 to $1,000.
Traders in Peshawar and Chaman corroborated that currency is being smuggled across the border to Afghanistan. Transporters are being used with the money hidden in special boxes in trucks and trailers, they said.
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