Dollar hits record high in open market.

Byline: Shahid Iqbal

KARACHI -- The US dollar rose to record high against the local currency reaching Rs135.30 after supply-side restraints pushed the greenback upwards in the open market.

Currency dealers said the dollar was sold as high as Rs135.70-80 during the day but closed at Rs135.30 registering a declining trend by the week's end.

'The appreciation was a result of short supply of dollars which pushed the price up but the demand remained constant during the day,' said Zafar Paracha, Secretary General of Exchange Companies Association of Pakistan.

The supply shortage came after media reports claimed that the International Monetary Fund (IMF) has asked the government to depreciate the rupee further in order to access funds.

On the other hand, the inter-bank market remained relatively stable without any significant change where the dollar was traded at a maximum of Rs134.15.

Bankers said that with the inflow of $1 billion from Saudi Arabia additional $2bn are expected to come later there is little chance for further devaluation of the rupee.

Pakistan recently received $1bn as part of $6bn Saudi package to help country's dwindling foreign exchange reserves which have fallen to critically low levels. The package includes $3bn for import of oil on deferred payment; the two packages collectively have helped the exchange rate stability.

However, news-driven sensitive currency market registered significant change in dollar rates during the week mainly due to the recently concluded IMF-led bailout...