Rupee weakens marginally

KARACHI: The rupee closed marginally weaker in the interbank market on Thursday owing to dollar demand from importers, dealers said.

The rupee ended at 278.43 per U.S. dollar, slightly lower from Wednesday’s close of 278.39, according to the data from the State Bank of Pakistan. In the open market, the rupee fell by nine paisa's against the dollar. The Exchange Companies Association of Pakistan reported that the rupee was trading at 277.66 per dollar, compared with 279.57 in the previous session.

Dealers said the rupee's decline in the interbank market occurred for the fourth consecutive session as a result of an increase in demand for dollars among importers and companies. “Importers had to purchase dollars to cover their payments, while remittances and export earnings did not provide enough supply to fulfil the demand for dollars,” a currency dealer said.

Pakistan's new government does not expect any significant currency devaluation as part of its negotiations with the International Monetary Fund to unlock billions of dollars in financing and support the country's economic reform agenda, Bloomberg reported.

There would be no reason for the rupee to weaken more than the range of around 6 percent to 8 percent witnessed in a typical year, according to Finance Minister Muhammad Aurangzeb. Pakistan's currency was last devalued in January 2023.