KARACHI: The rupee closed weaker on Tuesday due to dollar demand from importers after a holiday. The rupee ended at 279.77 to the US dollar, lower than Friday’s close of 279.67 in the interbank market. The markets were closed on Monday for the bank holiday for the deduction of Zakat.
“We saw importers entering the currency market to purchase dollars for making payments after the market reopened following a one-day holiday,” a foreign exchange dealer said.
The rupee also experienced a slight decline in the open market, trading at 281.3 per dollar, compared with 281.22 in the previous session. Analysts said the local unit is expected to remain range-bound as market players are monitoring first review of the Extended Fund Facility (EFF) programme with the International Monetary Fund (IMF) started on Tuesday.
“With the IMF emphasising stricter measures to curb tax evasion in the real estate sector, there could be concerns regarding the implementation of additional taxation measures,” said Chase Securities in a note.
“Furthermore, February’s Consumer Price Index inflation recorded a moderate rise of 1.5 per cent year-on-year, signalling some stability in price levels. However, Pakistan’s trade deficit surged by 33 per cent YoY to $2.3 billion in February, raising concerns over external account pressures,” it added. “On the global front, oil prices have declined by 2.0 per cent to a 12-week low as OPEC+ considers increasing output. This could be beneficial for Pakistan, as lower oil prices may ease inflationary pressures and reduce the import bill.”