Rupee weakens

The rupee weakened further against the dollar in the interbank market on Tuesday, as the central bank continued to shy away from intervention in the currency market, dealers said. In the interbank market, the rupee closed at 128.26/dollar after hitting an all-time low of 128 on Monday. “The currency fell further in a choppy trade today. It was trading between 128 and 128.50,” a dealer said. Traders expect the current trend of declining rupee to continue in the period ahead. The SBP believes an adjustment in the exchange rate along with the increased policy rate and other administrative measures would help contain domestic demand, in general, and reduce the imbalances in the external accounts, in particular. In the open market, the rupee ended marginally higher at 128.70 against the dollar as compared to 128.75 in the previous session.