KARACHI: The US dollar on Thursday hit a 10-month high, crossing the Rs164 mark. The dollar has been appreciating against the rupee since May because of a number of reasons, including the higher current account deficit and import bills.

Each month of the second half of the financial year FY21 witnessed a current account deficit but it remained in surplus due to the achievement of the first half till the end of 11 months of the same year — only the June deficit pushed the entire year’s (FY21) surplus into a deficit of 0.6 per cent of GDP.

The dollar was at Rs164.1 on October 6 last year. Then it had been depreciating after achieving its highest level of Rs168 in August last year. On Thursday, the dollar closed at Rs164.1.

Since the middle of May 2021, the dollar appreciated by 7.15pc against the local currency which increased the cost of imported products and created uncertainty about the exchange rate stability.

Since the beginning of the new financial year the exchange rate looked shaky as the local currency lost 3.94pc against the US dollar. The market reacted over the policy-makers’ announcement about 2-3pc current account deficit, while the importers rushed for higher amount.

However, the SBP said the higher economic growth required higher imports.

The government was lucky to receive record $29.4bn remittances in FY21 and it again received $2.7bn in July FY22 indicating that the new financial year would also get help larger than the entire exports of the country.