Rupee weakens slightly on importer dollar demand

KARACHI: The rupee closed marginally weaker against the dollar (USD) on Thursday, following a two-day holiday for Muharram. Dealers attributed the decline to increased dollar buying by importers after the market reopened.

In the interbank market, the rupee ended at 278.17 per dollar, compared with the previous close of 278.11.As the currency market opened following two days of holidays, importers purchased dollars to cover their payments, which put pressure on the rupee, according to dealers.

Earlier in the week, the rupee had seen a minor appreciation on Monday due to positive sentiment surrounding the government’s recent $7 billion loan agreement with the International Monetary Fund (IMF). The markets were closed on Tuesday and Wednesday for 9th and 10th Muharram (Ashura).

The rupee stayed flat in the open market. It finished at 280.5 versus the greenback, unchanged from the previous close.Analysts anticipate the signing of the new Extended Fund Facility (EFF) programme with the IMF as a significant and positive development that will secure and strengthen the external sector outlook going forward.They think that the new loan programme has boosted investor sentiment which will lead to further consolidation of the currency.