Rupee falls on importers dollar demand

KARACHI: The rupee dropped against the dollar on Thursday due to dollar demand from importers after a holiday, dealers said. The rupee ended at 279.15 per dollar in the interbank market, compared with Tuesday’s close of 278.96.

“As markets reopened following a one-day holiday, there was a dollar demand for import payments. Exporter dollar sales and remittances did not provide enough supplies to meet market requirements,” a currency dealer said.

The markets were closed on Wednesday for the Kashmir Day holiday. In the open market, the rupee traded at 280.9 against the dollar for selling, compared with 280.91 in the previous session.

Higher imports have been putting little pressure on the rupee. According to data released by the Pakistan Bureau of Statistics (PBS), the country’s trade deficit widened to $2.313 billion in January, an 18 per cent increase from the same period last year. Imports rose by 10 per cent year-on-year (YoY) to $5.233 billion, while exports increased by 5.0 per cent to $2.92 billion. Foreign exchange reserves are declining, with the central bank’s reserves standing at $11.37 billion as of January 24, enough to cover more than two months of imports.