The dollar has dropped to Rs163.60 from Rs164.30 on August 3. Experts expect the rate to lower further as markets panicked.
“Imports increased in the closing month of June,” said Zafar Paracha, executive director of the Paracha Exchange and secretary Exchange Companies of Pakistan. “Importers increased the demand for dollars and exporters held their positions expecting the dollar rate to rise and then cash their export payments in dollars.”
Moreover, oil imports increased and oil prices also went up.
He said that Pakistan normally imports $4 billion of goods in a month, but in June this year, Pakistan imported goods worth $6 billion.
The country imported machinery in June as well, he pointed out. Machinery is an item that is not consistently imported, which means its imports generally have a one-off impact and import bills may come down in the coming months.
Paracha added that the withdrawal of US troops from Afghanistan and the Taliban’s increasing presence in the landlocked country has made the law and order situation in the region uncertain. It has raised security concerns in Pakistan as well.
“This precarious situation in the neighbouring country has halted Pakistan’s exports to Afghanistan which has reduced our dollar inflows,” he said, adding that Pakistan’s exports, remittances, and foreign exchange reserves have increased in the last financial year.
“There is no reason for the rupee to depreciate. The dollar will eventually return to somewhere between Rs155 and Rs160 within a month,” he said.
Forex Association of Pakistan Chairperson Malik Bostan also said that the dollar rate may gradually come down again.