Rupee ends weaker

KARACHI: The rupee ended lower against the dollar in the interbank market on Monday.The rupee closed at 281.76 per dollar, compared with the previous close of 281.66.

According to dealers, the market is generally optimistic about Pakistan’s economy, but the rupee is under pressure due to the rising demand for dollars for import payments.In April, imports of goods rose by 18 per cent year-on-year to $5.237 billion, compared to $4.44 billion in the same month the previous year. On a month-on-month basis, goods imports also increased by 6.0 per cent.

According to the recently released IMF report, banks continue to manage most of their FX inflows and outflows internally, which has resulted in low volumes in the interbank market.The IMF recommends reversing the January 2022 decision to shorten the repatriation period for export proceeds once macroeconomic stability and balance of payments conditions improve. The rebuilding of forex reserves through foreign exchange purchases should continue, as buffers remain low by Pakistan’s standards. Moreover, the global lender said that the exchange rate flexibility remains necessary to support external rebalancing and increase resilience to external shocks.