Rupee edges down

KARACHI: The rupee ended marginally weaker against the dollar on Monday due to increased dollar demand from importers for payments, dealers said.

The local currency closed at 166.82 against the greenback, compared with the previous closing of 166.79 in the interbank foreign exchange market. The rupee lost value against the greenback in the kerb market, as it ended at 167 versus the dollar, compared with 166.75 in the previous session.

“There was importer demand today. They bought greenback to settle their payments,” a currency dealer said. “Importers’ dollar demand surpassed workers’ remittances and greenback selling by exporters.”

The rupee has been under pressure since March after the State Bank of Pakistan slashed the interest rates by 225 basis points to 11 percent and coronavirus pandemic began in the country, which triggered outflow of foreign funds from the equity and bond markets.

Dealers said the World Bank’s report issued last week dented investor sentiment. Pakistan is expected to fall into recession with a skyrocketing fiscal deficit due to the coronavirus outbreak, according to the report. The country’s external position is likely to come under severe pressure, as remittances can witness a sharp decline while portfolio outflows to continue.