The dollar rose by Rs0.84 to reach Rs168.94 – the highest level in the country's history. The previous high was recorded at Rs168.43 on August 26, 2020.
After touching a low of Rs152.4 on May 7 earlier this year, the greenback is again going up again, rising over Rs16 in just four months.
According to chairman of the Forex Association of Pakistan, Malik Bostan, imports have been continually rising, which has made the dollar jump.
In July, Pakistan imported $5.5 billion of goods. In August, it reached $6.5 billion.
Bostan said that there are many importers who have dual citizenship of Pakistan and Afghanistan while many have businesses in both countries. Such importers are also sending goods from Pakistan to Afghanistan.
In addition to this, Pakistan has to make external payments. In the next four years, a total of $44 billion will come to the country and in comparison, the trade deficit will be $53 billion. There is a gap of $9 billion between debt and interest, which is putting pressure on foreign exchange reserves and the Pakistani rupee.
According to economic analyst Raza Jafri, market talks suggest that Pakistan was repaying loans taken from China for CPEC projects, which is about $3 billion. In addition to this, Pakistan was also paying profits from investors.
Abdul Azeem, an economist, says that the main reason for the rise in the value of the US dollar is an increasing burden of imports, especially oil, which has a large share. The news of payments to China also had an effect on the market, but China will be persuaded to defer payment through negotiations.
He said that the dollar could go up to the level of Rs170 but if it goes above that, the SBP is expected to intervene so the value of the dollar is not likely to rise much.