Dollar may breach Rs 65 level by year-end

After receiving a clear-cut indication from the State Bank of Pakistan (SBP) that it would not stop the rupee from slide, the market players were anticipating that the dollar might breach the new barrier of Rs 65 by the end of the current year, money experts said. At present as a result of several interventions by the State Bank, the rupee recovered some loss grounds on Friday verses the dollar for buying and selling at Rs 60.00 and 60.10 respectively.
Market analysts argued that the recovery might proof short-lived as the dollar was short in demand.
Furthermore, this factor might not help the foreign exchange reserve to hold its long time firmness days to come.
They said that it means that the rupee is trying to find its own way and depending on market forces, which is definitely not a sign of weakness.
Since the new fiscal year started, the rupee has lost nearly four percent, after hitting Thursday's low at Rs 61.40 for a dollar, market experts said.
To neutralise the worries over local currency's depreciation, the State Bank of Pakistan (SBP) Governor said that the rupee's fall was not a disappointing factor. This was occurring because of the economic growth in the country, he observed.
"And definitely, it will also help exporters to compete in the global markets," sources said.
In the meantime, apart from all these positive indications, the prices of daily use items are going up and how the salaried persons and general public who have no other source of income would survive under the circumstances?
Sky-high prices were barring the buyers from touching anything to check the material, analysts said. The government claims that it imports high and powerful machinery's and technology to create jobs in the country.
Explaining the state of spiralling inflation in the country, the governor said that the bank is seeking ways and means to tackle the emerging circumstances.
According to the market expectations, the inflation rate might cross the fixed target of 5.0 percent for the current fiscal year.
As a result of higher payment bills the trade deficit has widened, which on the other hand boosted the dollar and made dearer and also pushed the inflation rate to nine percent during the last three months.
Currency experts said that this year the ballooning import bills of high machinery's and wheat led to dollar's firmness versus the rupee.