Rupee extends losses against dollar

KARACHI: The rupee weakened for a third consecutive session on Wednesday pressured by dollar demand from importers, dealers said.

The rupee closed at 277.79 per US dollar in the interbank market, compared with 277.74 on Tuesday.

Dealers said that the rupee’s decline persisted as importers’ dollar demand exceeded exporters’ dollar sales.

“At the end of the month, firms and importers typically boost their dollar demand to pay their obligations, which puts pressure on the local unit,” a dealer said.

“Exporters were reluctant to sell dollars forward as caution ahead of the State Bank of Pakistan’s monetary policy review next week,” the dealer added.

The upcoming monetary policy decision, scheduled for November 4 (Monday), is anticipated to bring a significant rate cut, Chase Securities said in a note.

“Additionally, the CPI [consumer price index] inflation figure, expected to be announced in two days, is projected to fall within the 7-8 per cent range and is likely to remain at similar levels in the coming months, reinforcing expectations for an aggressive rate cut,” it added.

The rupee also lost ground in the open market. It was trading at 278.72 against the dollar, slightly down from 278.66 in the previous session.