Rupee weakens

The rupee closed weaker against the dollar in the interbank market on Wednesday, dealers said. The rupee ended at 156.96 against the greenback, compared with the previous closing of 156.80.

In the open market, the rupee traded at 156.50 against the dollar. Forex dealers said the currency showed minor fluctuations during the day due to normal dollar demand from importers.

The State Bank also announced that it had completed all prior actions of the International Monetary Fund’s Extended Fund Facility. This also sent positive signals to the market participants.

The State Bank of Pakistan said a market-based system is implemented in Pakistan, which protects exchange rate from manipulation and simultaneously follows demand-supply mechanism. "The rupee has started posting gains due to improvement in the supply of the greenback. Demand for dollars remains low in the kerb market.

The reports of coming in more dollar inflows lifted investor sentiment," said Zafar Paracha, secretary general of the Exchange Companies Association of Pakistan. Data issued by the central bank said Pakistan posted a current account deficit of $12.678 billion in July-May FY19, narrowing from a deficit of $17.926 billion a year earlier.