Rupee weakens

KARACHI: The rupee ended weaker against the dollar on Monday because of higher import payments, dealers said.

In the interbank market, the rupee closed at 166.29 against the dollar, compared with the previous closing of 165.83. The local unit lost 47 paisas versus the greenback during the day. The rupee ended at 166.40 to the dollar, 20 paisas weaker from the previous closing of 166.20 in the open market.

Dealers said the domestic currency came under a renewed pressure due to increased dollar demand from importers. Traders were expecting that the State Bank of Pakistan would keep the policy rate unchanged at today’s meeting that would lead to outflow of greenback from the market.

The SBP kept the policy rate steady at 7 percent for the next two months, while keeping inflation in check. Remittances to Pakistan rose to $4.863 billion in July-August fiscal year 2020/21 from $3.712 billion a year ago.

FDI in Pakistan rose 40 percent to $226.7 million in the first two months of the current fiscal year. Total liquid foreign exchange reserves held by the country stood at $19.959 billion, compared with $19.961 billion in the previous week.