The rupee continued to depreciate as the local currency fell Rs2 compared with the US dollar on Wednesday.
According to State Bank of Pakistan, rupee closed at 221.42 on Tuesday, witnessing a 0.9 percent decrease to close at Rs223.42 on Wednesday.
The dollar has not only been strengthening against the rupee but also against six major peers, witnessing a 200-year high, according to the dollar index.
According to analysts, the effects of dollar strengthening globally have also been seen in Pakistan’s currency market.
Saad bin Naseer, director of Mettis Global, told local media that United Arab Emirates’ (UAE) new regulation making travelers from Pakistan carry 5,000 dirhams in cash has caused increase in the demand of dollar.
He further added that the demand of dollar in open market has increased by $5 million daily due to this one measure. He added that due to this, there has been a difference of around Rs10 in dollar rate in the interbank and the open market.
Naseer also said that the damage to crops has forced the government to import vegetables and that has resultantly added pressure over the demand of dollar. He said that the trade deficit has also been strained due to the increased imports of vegetables.
He also showed hope that the value of rupee would be stabilized once the promised $4 billion from friendly countries arrives in Pakistan.