Rupee ends slightly weaker against dollar

KARACHI: The rupee closed marginally weaker against the US dollar in the interbank market on Monday, pressured by increased import demand, dealers said.The rupee ended at 278.3 against the US dollar, moderately lower than its close at 278.12 on Friday.

The local currency was under pressure due to an uptick in demand for dollars from importers, according to dealers, and inflows from remittances and export proceeds were insufficient to cover this need.

“We expect the rupee to trade range-bound in the coming sessions depending on demand and supply of dollars in the market,” a currency dealer said.Pakistan’s current account deficit fell to a 13-year low in the last fiscal year due to a decline in trade deficit and an increase in remittances. The country recorded a current account deficit of $681 million in FY24, a 79 per cent lower than the previous year’s $3.3 billion gap.

The central bank’s foreign exchange reserves increased by $19 million to $9.424 billion as of July 12.Analysts said Pakistan’s deal with the International Monetary Fund (IMF) for a new $7 billion loan is expected to unlock further funding from other international financial institutions and bilateral partners, essential for Pakistan to meet its external obligations.The agreement is projected to help stabilize the Pakistani rupee and bolster foreign exchange reserves, providing a much-needed cushion against economic shocks.