Rupee hits two-year low

KARACHI: The rupee fell to its lowest level in two years on Tuesday, as higher import payments continued to put pressure on the local unit, and dealers said they expected the currency to weaken further in the days ahead.

In the interbank market, the rupee closed at 156.79/dollar, a level last seen on June 18, 2019. The rupee settled at 156.19 on Monday. It declined by 60 paisas, or 0.38 percent, during the session.

“There were increased import payments, especially for oil, and inflows were limited, which drove the rupee down,” a currency dealer said.

“Corporates and importers are buying dollars for the import of raw materials, machinery and equipment. They are placing their orders after the Federal Budget 2021/22 announcement,” he added.

Payments are usually higher at the close of June because of the companies’ rush to settle their bills and foreign debt payments.

The rupee also depreciated 0.44 percent, or 70 paisas, against the dollar in the open market. It ended at 157.30 to the dollar, compared with the previous closing of 156.60.

The rupee is likely to remain under pressure due to the prevailing situation of growing demand and higher oil prices.