Rupee erases gains

KARACHI: The rupee erased its gains from the prior three sessions against the dollar and experienced a modest depreciation on Tuesday due to increased dollar demand from importers.

The rupee closed at 282.11 to the dollar in the interbank market, compared with its previous close of 281.97.In the open market, the rupee remained stable for a third straight session, trading at 284.4 against the dollar.

Dealers said that the local currency faced pressure as importers stepped into the market to buy dollars to meet their obligations ahead of the Eid holidays. The financial markets will be closed from June 6-9 for the Eidul Azha holidays.

Commercial banks have reportedly been delaying import payments because of a shortage of foreign currency. The major foreign loan repayments that are due before the end of June and the requirement to satisfy the reserve requirements set by the International Monetary Fund (IMF) are the main causes of this shortage.

With just two trading sessions left before the federal budget announcement and the extended Eid holidays, analysts predicted that the rupee will probably stay range-bound.According to Prime Minister Shehbaz Sharif, negotiations with the IMF over the next federal budget have been fruitful, paving the way for a new phase of economic growth.