KARACHI: The rupee weakened further against the dollar on Thursday on the back of greenback demand from importers and caution ahead of the central bank’s policy review due next week.
In the interbank market, the local unit closed at 176.49 to the dollar, 0.15 percent down from Wednesday’s close of 176.22.
“The rupee came under pressure again on increased import payments and weak supplies,” said a currency dealer.
“The gains in the previous few sessions were largely driven by positive sentiments following the reports pertaining to the issuance of dollar sukuk by Pakistan’s government in the international capital market,” he added.
“The IMF [International Monetary Fund]’s announcement of holding its executive board meeting on January 28 aimed at reviewing the release of $1 billion from Pakistan’s $6 billion loan programme also boosted sentiment.” Traders were reluctant to take fresh positions due to the monetary policy announcement on Monday.
The State Bank of Pakistan (SBP) is widely expected to keep interest rates steady when it unveils its monetary policy. The dealers will keenly watch as it may give an outlook for the country’s economy in general and the external account in particular.
The SBP has so far raised the policy rate by 275 basis points to 9.75 percent in the first half of the current fiscal year owing to rising current account deficit and inflationary pressures.
According to a poll conducted by Topline Research, around 60 percent participants believed that there would be no change in the policy rate in the upcoming monetary policy statement whereas the remaining participants expected an increase.