Rupee weakens in interbank, gains in open market

KARACHI: The rupee closed weaker on Wednesday as importer dollar demand outweighed supplies from exporters and remittances, and investors continued to be concerned about the ongoing tensions in the Middle East.

In the interbank market, the rupee ended at 278.39 per dollar, compared with Tuesday’s close of 278.29.However, the rupee gained ground in the open market trade. The local currency was trading at 279.57 against the dollar for selling, up from 279.68 in the previous session.

According to a currency dealer, demand for dollars from importers was present, and exporters were reluctant to sell foreign currency. Furthermore, after the conclusion of the holy month of Ramazan and Eid festival last week, remittances from Pakistani citizens employed abroad have begun to slow down.

This slowdown in remittances contributed to the market's weaker supply of dollars. Interestingly, the market did not respond enthusiastically to the Saudi team's visit to Pakistan. During this visit, Islamabad presented 25 projects worth an estimated $32 billion in possible investments to a high-level delegation.

Finance Minister Muhammad Aurangzeb stated that Pakistan has initiated discussions with the International Monetary Fund over a new multi-billion dollar loan agreement to support its economic reform program. Despite oil prices declining for the third straight session on Wednesday, uncertainty in the Middle East persists due to contradictory remarks made by Iran and Israel.