Friday December 09, 2022

Rupee inches down

By Our Correspondent
August 19, 2022

KARACHI: The rupee extended falls for third straight session, declining 2 rupees against the dollar in the open market on a dollar shortage.

The local unit on Thursday ended at 219 to the dollar in the open market, compared with Wednesday’s close of 217.

Traders said soft dollar supplies yielded pressure on the domestic currency.

“Exchange companies are facing a dearth of the greenback as customers are not selling dollars to the open market,” said a currency dealer.

“Dollars from Pakistan's market are being purchased by traders in Afghanistan, which causes shortages. This exerted strain on the rupee,” he added. In the interbank market, the rupee edged lower to 214.95 versus the greenback. It had finished at 214.88 in the previous session.

“There was no unusual importer dollar demand, but exporters have started staying away from the market,” said a dealer in the interbank market. “We think the rupee has been stabilised and will trade around the current levels in coming days,” he added.

The government on Thursday lifted ban on import of non-essential and luxury goods to meet a condition of the International Monetary Fund (IMF) ahead of the board's meeting later this month to revive the loan programme.

However, the government announced imposition of heavy duties on completely built units cars, mobile phones, and electronic appliances to discourage imports and conserve foreign exchange. It will take some time to evaluate the impact of opening up luxury imports on the rupee, according to analysts.

The rupee has increased by 11 percent against the dollar as of August 15, also outperforming major global currencies. The rupee saw a sharp recovery after it sank to a record low of 240 per dollar set in late July, becoming one of the worst performing currencies in the world.

The rupee plunged by 34 percent in July alone, suffering its biggest monthly fall since 1972.