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Friday April 19, 2024

Rupee weakens on imports

The rupee also lost a little ground in the open market

By Our Correspondent
March 05, 2024
Pakistani currency notes of Rs1000 and Rs5 coins can be seen in this picture. — AFP/File
Pakistani currency notes of Rs1000 and Rs5 coins can be seen in this picture. — AFP/File

KARACHI: The rupee ended slightly weaker on Monday due to an uptick in dollar demand from importers, dealers said. In the interbank market, the rupee closed at 279.26 to the dollar, compared with the previous close of 279.19. The local unit fell by 0.03 percent during the session.

The rupee also lost a little ground in the open market. It was trading at 282.05 for selling, down from 282.03 in the previous session. Dealers said that the rupee fell because inflows from export earnings and remittances were not enough to meet the importer and corporate demand. The rupee is expected to trade range-bound this month because of healthy dollar supplies tied to Ramazan and export proceeds.

In addition, traders will be closely watching the final review of the $3 billion International Monetary Fund loan programme and the central bank’s monetary policy decision, which are slated for this month, to determine the rupee's future direction. Although swap premiums are currently at a great rate, analysts predict that they will weaken over the next week as there is an increased likelihood that interest rates will decline.

They anticipate that the rupee will stabilise and mostly stay between 279 and 281. There is plenty of dollar liquidity, and more inflows are expected. Exporters, who were mostly focused on the 1 and 2 month tenors, were observed to be increasing their forward selling last week.