Rupee loses more ground

KARACHI: The rupee extended losses for a second consecutive session in the open market on Wednesday, despite emerging stability in the foreign exchange market and central bank’s supportive measures.

The local unit fell by 4 rupees to close at 217 per dollar.

The currency lost ground, despite the State Bank of Pakistan's favourable move to permit exchange firms to export US dollars to the international market, according to forex traders.

“The sudden decline in the rupee can be attributed to a lack of dollars in the open market, which may be brought on by the smuggling of dollars to Afghanistan. The rupee is now trading at 220 in the Peshawar currency market.

Besides, customers do not sell US currency in the open market,” said Zafar Paracha, the general secretary of the Exchange Companies Association of Pakistan (ECAP).

The rupee also snapped an 11-session winning streak in the interbank market. It ended at 214.88 to the dollar, 0.46 percent, weaker than Tuesday’s close of 213.90.

“The local unit weakened on the back

­of soft dollar supplies, the sentiment was still positive though. The forward selling of dollars from exporters was inadequate to meet the market demand,” said another dealer.

Pakistan has submitted the letter of intent to the IMF and its board meeting is expected on August 29 for loan approval. This will pave the way for the disbursement of approximately $1.18 billion in the country’s account by the end of this month.

The downward revision in the global oil prices is expected to ease pressure on Pakistan’s import bill.

However, remittances from Pakistani workers employed abroad saw a declining trend in the first month of this fiscal year. Remittance flows fell 8 percent year-on-year to $2.5 billion in July.