Rupee falls

KARACHI: The rupee extended losses for a second straight day on Tuesday on higher import payments and lesser supplies against the importer and corporate demand, dealers said.

In the interbank market, the local unit closed at 176.72 to the dollar, 0.13 percent down from Monday’s close of 176.49.

“We saw demand for the US currency from importers and the corporate, while the inflows remained weakened,” said a currency dealer.

“Though, the market had already priced in a 80 percent chance of a status quo in the January monetary policy, it didn’t react to a surprising State Bank of Pakistan (SBP)’s forward guidance on the interest rates, improvement in the inflation and the external current account outlooks and the issuance of $1 billion sukuk in the international capital markets,” he added.

The SBP held the policy rate steady at 9.75 percent and signaled that the rates would remain unchanged in the near term. It said growth and inflation seems to be moderating, with inflation expected to be declining in the next fiscal year.

Moreover, the SBP said further spike in international commodity prices would not majorly affect the monetary policy setting. However, it slightly lowered its projections for gross domestic product for the 2022 fiscal year to around 4.5 percent from 5 percent previously.