ISLAMABAD-US dollar touched Rs169 on Friday for the first time in Pakistan’s history, as coronavirus shocks kept the foreign currency supply tight amid drying up inflows.

However, later, US dollar has closed at Rs165.54 in the interbank market. According to details, the dollar had traded at Rs 169 in the start of the day. However, its value decreased because of inflows from exporters. Market during the session also witnessed recovery of Rs3.96.

According to the reports, the local currency lost a further 2.87 in intraday trading yesterday after hitting a record low of Rs 166.13 on Thursday. On Thursday, the rupee had slid 2.8% or Rs5.08 from Wednesday’s close of Rs161.60 due to interest rate cuts and repatriation of hot money amid increasing uncertainty in global markets fuelled by the coronavirus pandemic.

The rupee had remained stable, trading in the range of 154-155 between October 2019 and March 2020 under the market-based exchange rate regime. It started depreciating from earlier this month and has lost a cumulative Rs14 so far. The government is making efforts to borrow up to $4 billion from lending agencies and donors which would help the country’s foreign exchange reserves to remain intact. Meanwhile, the country’s import bill would also reduce during ongoing fiscal year due to halt in economic activities in the country due to prevailing COVID-19. The reduction in import bill would also reduce pressure on the rupee, which is currently under pressure. The increase in dollar value would enhance the country’s debt and inflation rate in the country.

Meanwhile, the Islamabad Chamber of Commerce and Industry (ICCI) has shown great concerns over the sharp fall in the value of rupee against dollar as it would create more problems for business and industry apart from further weakening the economy.

Muhammad Ahmed Waheed, president, Islamabad Chamber of Commerce and Industry, said that Prime Minister Imran Khan had provided a good relief to people by announcing Rs.15/litre cut in the price of POL products, but sharp drop of more than Rs.8 against dollar would nullify this benefit to the people and bring more inflation for them. He said that some industries were importing 70 percent raw material for their manufacturing activities and sharp rise in dollar would further push up production cost making our industry and exports more uncompetitive in the international market. He said that due to coronavirus issue, trade and industrial activities were already suffering badly and further fall in the value of rupee against dollar would jeopardize the survival of businesses.

ICCI President said that already 25 percept population of the country was below the poverty line and devaluation of currency would push more people towards poverty. He said that the main cause of currency devaluation was sudden shortage of dollar from the market as people have started to withdraw investments from the stock market to purchase dollars. He called upon the Governor State Bank of Pakistan to take notice of this situation and initiate urgent remedial measures to bring stability in the value of rupee in order to save the economy from further troubles.