Monday December 05, 2022

Rupee extends losses

By Our Correspondent
November 25, 2022

KARACHI: The rupee on Thursday extended losses to a second consecutive session against the dollar in the interbank market on a mismatch between market inflows and outflows.

The local unit ended at 223.92 per dollar, 0.05 percent weaker than Wednesday’s close of 223.81.

In the open market, the domestic currency closed unchanged for the third straight day. It settled at 231 to the dollar.

Traders said the rupee declined on a mismatch between market inflows and outflows. Additionally, the pressure on the local currency was increased by rapidly diminishing foreign exchange reserves, they added.

The forex reserves held by the State Bank of Pakistan stood at around $8 billion as of November 11.

“There was some demand for the dollars from importers, although supplies were weakened,” said a forex trader.

“As political turmoil appears to have subsided with the appointment of a new army chief, there are some encouraging signs that the rupee's outlook will improve,” he added.

China and Saudi Arabia pledged to provide Pakistan a financing package of $13 billion earlier this month. But as of yet, neither investments nor funding have come from the allies.

Traders said political stability was crucial to please China, Saudi Arabia, and foreign investors.

On Wednesday, a top Japanese Investment Bank, Nomura, warned that seven countries - Egypt, Romania, Sri Lanka, Turkey, Czech Republic, Pakistan and Hungary - were at a high risk of currency crises. It’s an ominous warning sign of the growing broad-based risk in emerging market currencies, according to the bank.