Rupee weakens

The rupee weakened on Tuesday, as fears of a complete countrywide lockdown to curb the spread of coronavirus disease (COVID-19) weighed on the market sentiment and led to dollar buying from importers.

In the interbank market, the rupee closed at 159 against the dollar, down 33 paisas from the previous closing of 158.67. “An increased demand for the greenback from importers and weak supplies put pressure on the currency,” a forex dealer said.

“There was scarcity of dollars and importers were looking for the US currency,” he added. Traders expect the country is moving closer to a full lockdown soon in an effort to control the growing spread of coronavirus.

Sindh has been in a lockdown for 15 days due to the coronavirus epidemic. The rupee has depreciated by more than three percent since the coronavirus pandemic started in Pakistan.

Traders see the rupee to stay below 160/dollar level in the coming days. “While a slowdown in exports and remittances will inevitably hit the balance of payments, the central bank will not hesitate in these trying times to intervene in the market to keep the rupee stable,” another dealer said. The SBP cut its policy rate by 75 basis points to 12.50 percent in the last monetary policy meeting.