Rupee extends losses

KARACHI: The rupee extended losses for the third straight session on Monday on increased dollar demand from importers and companies, dealers said.

In the interbank market, the local currency closed at 164.08 against the greenback, down from the previous closing of 163.10. The rupee ended at 164/dollar in the open market. It had settled at 163.50 in the previous session.

“Banks bought dollars to meet the demand of the corporates, while imports also came to the market for making their payments. This put pressure on the rupee,” a forex dealer said. “The currency is also weighed down by lower foreign exchange inflows from exports earnings and workers’ remittances.”

“We expect the currency to weaken further due to weak supplies and high demand for the US currency.” Traders said the pressure arising from servicing debt could decline the value of the rupee and lead to further reduction in the foreign exchange reserves in the subsequent weeks.

There are some debt repayments due against the International Monetary Fund on June 19. Pakistan’s foreign exchange reserves declined to $18.597 billion as of May 21 from $18.618 billion a week ago. The foreign exchange reserves held by the State Bank of Pakistan fell to $12.073 billion from $12.129 billion.