Friday September 24, 2021

Rupee declines

July 28, 2021

KARACHI: The rupee ended marginally weaker on Tuesday due to an uptick in dollar demand from importers to settle payments, dealers said.

In the interbank market, the rupee closed at 161.33 per dollar, compared with Monday’s close of 161.23. The rupee stayed flat at 161.50 against the dollar for the second consecutive session in the open market.

Dealers said a renewed demand pressure from importers kept the domestic currency volatile during the session. Besides, supplies were not enough to cater the market requirement. In addition to higher imports, widening of the current account deficit put pressure on the exchange rate.

Some dealers saw the strengthening of the US dollar against the basket of major currencies as one of the reasons for rupee depreciation these days.

“The Dollar Index continued gaining strength, showing a strong correlation to rupee weakness,” said another dealer. Traders awaited the monetary policy announcement due on Tuesday evening.

Analysts expect the State Bank of Pakistan to keep the policy rate unchanged at 7 percent in its monetary policy for the subsequent two months.

The rupee is expected to trade in a range-bound manner with slight weakness in the coming sessions.