The Pakistani rupee further lost ground against the US dollar as it depreciated by Rs1.16 in the interbank market on Wednesday.
The local unit closed at 220.875 in the interbank market, according to the State Bank of Pakistan (SBP).
The dollar traded at Rs221.35 against the local currency around 1pm during intraday trade in the interbank market.
The rupee has been witnessing a downward trend for over a week after it snapped the 13-day winning streak against the dollar on October 12. On Tuesday (October 19), the rupee closed at Rs219.71 after the dollar appreciated by Rs0.82.
Meanwhile, in the open market, the rupee was trading at 228 after losing 1.80 on Wednesday.
Analysts have said that the local unit will remain rangebound in the ongoing week, depending on the demand for greenback by importers as the central bank has started to clear pending letters of credit.
Talking to The News, economist and former adviser to the federal ministry of finance Dr Khaqan Hassan Najeeb had said the movement of a currency in a market-based exchange rate can be largely influenced by three factors — market sentiment, speculation and fundamentals.
"The rather disorderly movement that was seen in the rupee earlier all the way to 240 was partly sentiment and partly speculation," the economist had said.
With the element of speculation slowing and the liquidation of export receipts held abroad, the rupee saw a correction to nearly Rs 218, Khaqan had said.
"The exchange rate movement is likely to be more fundamentally driven dependent on dollar inflows and the foreign exchange reserves held by the state bank of Pakistan," he had said.
"At the same time managing the current account deficit is an important influence in the market-based exchange rate movement for coming months," Khaqan had said.
The central bank’s foreign exchange reserves decreased by $303 million to $7.596 billion as of October 7 due to external debt repayments.
The central bank’s reserves are enough to cover hardly one month’s worth of imports.
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