Rupee falls against dollar

KARACHI: The rupee closed lower against the dollar in the interbank market currency market on Monday as dollar demand from importers surpassed greenback sales from exporters.

The rupee fell by 0.02 per cent to 279.27 versus the dollar. It had ended at 279.21 on Friday. However, the rupee appreciated in the open market, trading at 280.98 per dollar, compared with 281.06 in the previous session.

Dealers said the local unit lost ground in the interbank market due to weak supplies of dollars. The decline in the foreign exchange reserves also put pressure on the rupee. The forex reserves held by the State Bank of Pakistan (SBP) decreased by $529 million to $11.17 billion between January and February 7, 2025. This decline happened even though the current account showed a half-billion-dollar surplus in December, with a modest surplus predicted for January.

Analysts said that the financial account, which consists of foreign investments and loans, is drying up. Should this pattern persist, the SBP could have to maintain a current account surplus with few options, such as letting the rupee weaken and avoiding further interest rate cuts. Import restrictions might reappear as last resort if reserve depletion quickens.