Rupee weakens

KARACHI: The rupee fell 0.52 percent, crossing 162 levels against the dollar on Friday amid a sharp increase in demand for the greenback from importers to make routine payments, dealers said.

In the interbank market, the rupee closed at 162.32 per dollar, compared with the previous close of 161.48 in the interbank market. It lost Rs84 paisas during the session.

The rupee remained under pressure against the greenback for the second consecutive day due to persistent higher importer demand. Moreover, the higher than expected June current account numbers also added pressure to the local unit.

Pakistan’s balance of trade position took a big turn in June, changing the surplus current account seen in 11 months of the last fiscal year into a deficit.

The country’s CAD clocked in at $1.64 billion in June, taking FY2021 number to $1.86 billion. An above expected number for June is mainly owed to higher machinery, food and petroleum imports. The one off import of defence equipment worth $450-550 million was also made in June.

Analysts see import growth to surpass growth in exports by an even wider margin in FY2022, due to the higher oil prices, expansionary fiscal policy and resumption of economic activity. In this backdrop the rupee is likely to remain under duress this fiscal year.