Rupee slightly drops against dollar

KARACHI: The rupee ended marginally weaker on Monday owing to an uptick in dollar demand from importers, dealers said.In the interbank market, the rupee closed at 278.64 per dollar, down from 278.5 in the previous session.

“It is normal for importers to have higher dollar demand at the beginning of the week. However, we need to keep an eye on whether exporters’ unwillingness to sell dollars in bulk causes the rupee to lose further ground in the upcoming sessions,” a currency dealer said.

The rupee ended at 280.4 versus the dollar, unchanged from the previous close.Analysts said the International Monetary Fund executive board is expected to approve Pakistan’s $7 billion loan programme by the end of this month. For the time being, this should maintain the rupee’s stability.

“The government is currently focused on securing approval for the IMF programme and advancing energy policy initiatives,” said Chase Securities in a note.Ongoing negotiations with China are centred on debt rollover and reprofiling. The IMF executive board’s approval is anticipated by the end of the month,” it added.

“Remittances have consistently exceeded expectations, reaching $3 billion per month. Initially thought to be influenced by seasonal factors, this trend appears to be stable, helping to maintain a balanced current account and providing additional room for imports to support local industries,” it said. Analysts claim that neighbouring countries have a higher demand for dollars, and if smuggling is not dealt with harshly, the problem may worsen and impact remittances and dollar hoarding.