KARACHI: The US dollar rose to record high against the local currency reaching Rs135.30 after supply-side restraints pushed the greenbacl(upwards in the open marl(et.

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 receive d $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 pacl(ages 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-le d bailout negotiations. During the week, the dollar gained Rs1.10 against the local currency in open market.

The dollar was traded as Rs134.20 on Monday and Rs135.30 on Friday.

Currency dealers in the inter-bank market did not see deprecation in the near future but were unsure of the IMF negotlations and the aftermaths of the expected deal.

So far the government has reportedly rejected further deprecation of rupee despite widening current account deficit; cumulatively, the country requires about $12bn to plug the hole. The prime minister has visited Saudi Arabia, China, UAE and Malaysia to secure funds in order to meet the challenges faced by the economy.

`Keeping dollar is safe compared to saving rupee. There is always fear that rupee may get depreciation and I would make loss without any economic activity,` said a banker. This was the reason that foreign exchange reserves of scheduled banks remained high during this calendar year despite massive decline in the reserves of the State Bank.

The reserves of scheduled banks increased to $6.428bn on November 16 compared to $6.349bn on Nov 9.