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Tuesday April 16, 2024

Rupee weakens on importers' dollar demand, low reserves

The rupee closed the day at 279.36 to the dollar in the interbank market, down from 279.33 on Thursday

By Our Correspondent
February 24, 2024
A foreign currency dealer counts US dollars at a shop in Karachi on March 2, 2023. — Online
A foreign currency dealer counts US dollars at a shop in Karachi on March 2, 2023. — Online

KARACHI: The rupee edged lower on Friday due to sluggish inflows and an uptick in dollar demand from importers, dealers said.

The rupee closed the day at 279.36 to the dollar in the interbank market, down from 279.33 on Thursday. The local unit also fell in the open market, where the selling price for the rupee was 282.24, down from 282.16 during the previous session.

“Importers’ dollar demand was present, as it generally is at the end of the month. Remittances and dollar supplies from exporters, however, were insufficient to match that need,” said a currency dealer.

The decrease in the foreign exchange reserves also affected investor sentiment. Pakistan’s foreign exchange reserves held by the central bank fell by $44 million to $8.013 billion as of February 16 due to debt repayments.

Analysts believe that because Pakistan has low foreign exchange reserves relative to its significant and imminent external debt payment obligations, it needs to pursue another loan programme from the International Monetary Fund.

According to Bloomberg News, Pakistan intends to approach the International Monetary Fund for a fresh loan of at least $6 billion to assist the next government in paying off billions of dollars in debt that is due this year.