Rupee falls against dollar

KARACHI: The rupee weakened on Monday due to increased dollar demand from importers and a slowdown in exporter dollar conversion, dealers said.

The rupee ended at 278.7 per dollar in the interbank market, compared with the previous closing rate of 278.56.Dealers said there was a dollar buying pressure from importers and companies, but forward selling by exporters slowed down to a trickle. This caused a decline in supplies.

In the open market, the rupee also dropped. The local unit was trading at 281.03 per dollar, down from 280.86 on Friday. Dealers said that there was pressure on the rupee as importers and companies bought dollars.

However, the supply declined because exporters were selling dollars in forward at a much slower pace. Investor sentiment was negatively impacted by the delay in the approval of a $7 billion loan from the International Monetary Fund’s executive board for Pakistan, according to Zafar Paracha, the general secretary of the Exchange Companies Association of Pakistan.

“Although there wasn’t a significant demand for the dollar, inflows in the open market slowed due to difficulties in selling dollars to exchange companies caused by heavy rains in Sindh, Khyber Pakhtunkhwa, and Punjab,” Paracha said.

“The grey market has become active again, with the dollar trading at 284 against the rupee in Peshawar. Authorities have initiated a crackdown to control the grey market’s activity, so it is hoped that the pressure on the rupee will ease,” Paracha added.