Wednesday October 27, 2021

Rupee extends losses

October 14, 2021

KARACHI: The rupee weakened to yet another record closing low on Wednesday on increased import payments and pessimism about the country’s economic outlook.

The rupee closed at 171.13 to the dollar in the interbank market. It had ended Tuesday’s session at 171.04. The local unit hit its second record low against the greenback in two days.

In the open market, the rupee was quoted at 171.90 per dollar at the close. It was at 171.60 in the previous session.

“Demand for the US currency remained on a higher side due to import payments, while supplies were inadequate to meet the demand,” said a currency dealer at a big commercial bank.

Besides, the growth forecast made by the International Monetary Fund (IMF) also affected sentiment on the rupee, the dealer added.

The IMF expects Pakistan’s economy to grow at 4 percent this fiscal year, lower than the government’s target of 4.8 percent for FY2022. The Fund forecasts the average rate of inflation to be around 8.5 percent, current account deficit of 3.1 percent, and employment rate at 4.8 percent.

The rupee has been under pressure due to higher imports, the spike in global commodity prices, and the widening of the current account deficit.