Rupee weakens

The rupee reversed gains to end lower on Tuesday, as month-end demand for the greenback from importers weighed on the domestic currency, market participants said.

The rupee closed at 150.22 against the greenback, 48 paisas, or 0.32 percent, weaker than Monday’s closing of 149.74 in the interbank market. It had traded in the range of 149 to 150.75 during the day.

The rupee was flat at 150 at the end of the forex trade in the open market.

“The currency weakened in a volatile trading due to demand and supply factors and mostly pending payment pressure as New York forex market was closed on Monday,” a market participant said.

“Dollar buying from a foreign bank also exerted pressure on the rupee.” The rupee is expected to trade in the band of 149 to 151 against the dollar this week, dealers said.

Dealers expect pressure on the currency to ease with strong remittances due to Ramazan and Eid.

However, the rupee is likely to give up recent gains and weaken over the next month hurt by current account slippages and imposition of new taxes in the upcoming budget.

The SBP raised policy rate by 150 basis points to 12.25 percent on Monday in a bid to fight rising inflation after a step increase in fuel and food prices and weakness in the rupee sparked by dwindling foreign exchange reserves.