Rupee weakens

KARACHI: The rupee continued its slide against the dollar in the interbank currency market on Monday, dealers said.

The rupee closed at 161.05 against the dollar, weaker from the previous closing of 160.73. It dropped 32 paisas during the session. In the open market, the rupee lost 35 paisas to end at 161.35 against the dollar.

Dealers said the local currency lost grounds at higher-than-expected pace due to increased dollar demand from importers and the corporate sector. The market didn’t react negatively to the monetary policy announcement by the central bank on the same day.

The State Bank of Pakistan kept the policy rate unchanged at 7 percent for the second time since September. “We didn’t see much of a reaction in the forex market. This was in line with the expectations. The consensus was of status quo and this will be neutral for the markets,” a foreign exchange dealer said.

A technical correction in the currency was expected as the dollar was in oversold territory, dealers said. The local currency has entered a consolidation phase. Traders took fresh positions and importers started buying dollars and booked forwards since last week. This put pressure on the exchange rate.