Rupee continues to weaken against greenback amid high dollar demand

KARACHI: In line with the increasing demand for the US dollar from importers due to import payment pressure, the Pakistani rupee continued to depreciate against the US dollar on Wednesday in the interbank market.

According to data released by the State Bank of Pakistan (SBP), the local unit closed at 222.41 losing 0.22% or Re0.50 compared to Tuesday’s close of 221.91.

Money dealers said that there has been no letup in the dollar demand that caused the rupee to remain under pressure, while a thin foreign exchange reserves cover coupled with political mayhem also continues to undermine the general outlook.

“Rupee might face more losses as the LCs (letters of credits) worth up to $100,000 were expected to be cleared by end of this week”, a currency dealer said.

SBP Governor Jameel Ahmad’s statement that the country had sufficient forex reserves to meet the foreign payments didn’t soothe investors’ nerves, dealers added.

The governor said investigations against the commercial banks involved in the exchange rate manipulation would be finished this month.

“The central bank would take necessary regulatory action against the banks,” he stated.