Rupee weakens

The rupee closed weaker in the interbank market on Monday, as some banks bought dollars amid demand for the US currency from importers, dealers said.

The rupee ended at 156.99 against the greenback, weaker from Friday’s closing of 156.83. “There was demand for dollars. We saw some banks buying dollars to meet importers’ demand,” a dealer said.

The rupee is likely to face pressure on the back of IMF loan repayment due next week. Pakistan will make $41 million worth repayment to the International Monetary Fund against the Extended Fund Facility on July 2.

However, in the kerb market, the currency managed to post slight gains. The rupee settled at 156.90 against the dollar, compared with 157 in the previous trading session. Investors were worried about the outcome of the Financial Action Task Force meeting finished last week.

FATF has granted two more months to complete compliance with the action plan submitted by the government last year. The next review is scheduled for September. Pakistan’s current account deficit narrowed to $12.678 billion in 11 months of the current fiscal year from $17.926 billion a year ago.

The country’s forex reserves fell to $14.639 billion during the week ended June 14 from $14.826 billion in the previous week. The forex reserves held by the State Bank of Pakistan dropped $203 million to $7.604 billion.