Rupee extends losses

KARACHI: Rupee dropped further against the dollar on Tuesday, weighed down by higher import payments and thin supplies, traders said.

It closed at 158.37 per dollar, 0.12 percent lower than Monday’s close of 158.18 in the interbank currency market. Domestic currency was weaker at 159.10 to the dollar, compared with 159 in the previous session in the open market

“Demand from the importers and the corporate sector was higher, while inflows from the remittances and export proceeds were not enough to cater the demand,” said a foreign exchange trader.

Dealers expect the currency to weaken further to trade at 158.50 per dollar this week, with a few expecting it to stabilise by the end of this month.

The rupee has been under pressure on the back of surging import payments.

Imports rose 26 percent to $56.1 billion in the last fiscal year of 2020/21. The rise in imports is attributed to pickup in economic activity, increase in machinery imports and spike in international commodity prices.