KARACHI (APP) - The US dollar gained Rs 1.70 to record a two- year high of 87.10 against Pak currency on Friday on high demand and short supply in the kerb market, currency dealers said. The US dollar closed at Rs 86.90 and 87.10 for buying and selling as compared to 85.20 and 85.40 the previous day. "Speculative buying and oil payments led to rise in the dollar rate," said President of Forex Association of Pakistan (FAP) Malik Bostan, while talking to APP. He said "due to payment for oil, procurement of dollar for upcoming Haj season, and buying by private tour operators has pushed the demand," he added. The US dollar had touched the highs of Rs 91 mark in the year 2007. The dollar rates also jumped in the inter-bank market to 86.15/86.20 for buying and selling as compared to 85.55/85.60 the previous day. "Upcoming budget for next fiscal is also the factor that stakeholders have started hoarding US dollar," Bostan pointed out. Banking sources said that some leading oil distribution companies have also resorted o huge buying of the greenback to make payments abroad which further led to shortage of the currency in the local market.