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Tuesday February 27, 2024

Rupee slips against dollar in interbank market

Dealers say rupee declined due to an uptick in dollar demand from importers and weak inflows from exporters

By Our Correspondent
February 13, 2024
This image taken on January 13, 2024, shows Pakistani currency notes of thousands. — Geo.tv/Saad Aalam Angaria
This image taken on January 13, 2024, shows Pakistani currency notes of thousands. — Geo.tv/Saad Aalam Angaria

KARACHI: The rupee gave up previous sessions’ gains to close marginally lower against the dollar in the interbank market on Monday.

The rupee closed at 279.33 to the dollar, compared with 279.28 in the previous session. The local unit fell by 0.02 percent during the session. In the open market, the rupee also lost ground. It was trading at 281.19 per dollar for selling, compared with 281.01 on Friday.

Dealers said the rupee declined due to an uptick in dollar demand from importers and weak inflows from exporters. However, they expect the rupee to trade range-bound in the coming days supported by increased dollar sales from exporters in forward.

With the elections over, the market anticipates additional bilateral and multilateral flows, and analysts predict that, despite potential bumps along the way, the third International Monetary Fund’s review will end with a successful payout. However, the upside is likewise constrained, and any increase above 276 will begin to negatively impact the nation's exports. The rupee is expected to trade this month between 278 and 282.

Pakistan received $705.6 million from the IMF as the second tranche of a $3 billion bailout last month. The ongoing IMF lending programme expires in March.

Internationally, the dollar edged higher against the euro and other major currencies on Monday as investors await data on U.S. inflation and retail sales this week for clues on when the Federal Reserve may begin widely anticipated interest rate cuts.

The euro fell 0.22 percent to $1.07595 as a holiday in most major Asian markets kept markets relatively subdued at the start of what could prove a busy week. Sterling was last trading at $1.2613, down 0.10 percent on the day.