Rupee drops on tariff uncertainty

KARACHI: The rupee maintained its downward trend for the third consecutive session on Wednesday, as sweeping US tariffs came into effect, including a 104 per cent levy on China, exacerbating concerns of a global economic slowdown.

The rupee closed at 280.78 per dollar in the interbank market, slightly down from 280.73 in the previous session. The rupee also declined in the open market. It traded at 282.15 versus the dollar, compared with 281.96 on Tuesday.

Dealers said the local unit posted more losses, tracking a sharp decline in the Pakistan Stock Exchange. The benchmark KSE-100 index plummeted by 1,379 points due to concerns over the trade war, as China retaliated against US duties.

However, analysts believe the declining commodity prices to reduce Pakistan’s oil import bill and inflation.“Investors appear to be adjusting to this new normal, and the perceived impact on Pakistan remains limited,” said Chase Securities in a note.

“On the positive side, oil prices continue to decline, which bodes well for Pakistan’s external account and should help ease inflationary pressures. As a result, the current account is expected to remain stable in the near term,” it added.