Rupee crosses 229 mark against dollar

KARACHI: The rupee crossed 229 per dollar mark in the interbank market on Thursday as investors fretted about a deepening balance of payments crisis amid US dollar shortages in the country, analysts said.

The local unit closed at 229.15 to the dollar, 0.10 percent weaker than Wednesday’s close of 228.91.

The domestic currency fell by 50 paisas to 239.50 in the open market.

Delays in the International Monetary Fund (IMF) loan programme, continuous political unrest, and the country’s deteriorating external finances have collectively hampered investors' confidence in the economy and the rupee as well, according to analysts.

“Investor unrest is a result of the government’s inability to issue a policy statement outlining its future handling of the problem,” said an analyst.

However, the market is fueled by optimism that the ministry is making progress in restarting the IMF programme. The currency will recover if the government implements any measures to reinstate the bailout package, he added.

“Any development is not receiving a favourable response from the foreign exchange market.

The IMF programme’s resumption is the market's main trigger.”

On Wednesday, Governor State Bank of Pakistan (SBP) Jameel Ahmad said the UAE had rolled over the deposits of $2 billion. He added that from the next week, the nation would begin to receive dollar inflows.

The chief of the SBP also disclosed that the probe into private banks suspected of engaging in currency manipulation was over. The central bank has said it will take legal action against banks that manipulate exchange rate within their foreign exchange operations.