Rupee extends losses for second consecutive session

KARACHI: The rupee continued to decline for the second consecutive session in the interbank market on Tuesday.

The local unit closed at 278.7 per US dollar, compared with Monday’s close of 278.64.Dealers said the rupee continued to depreciate slowly due to increased dollar demand from importers, low supplies from exporters and remittances.

In the open market, the rupee lost little ground against the dollar. It was trading at 280 versus the dollar, down from 279.75 in the previous session.According to dealers, the future course of the rupee will depend on the final approval of a $7 billion loan programme from the International Monetary Fund for Pakistan.

Finance Minister Muhammad Aurangzeb, in a televised speech said the country expect to get final loan approval from the IMF’s executive board on time as the government is in the final stages of securing external financing assurances.

The staff-level agreement with the IMF was finalized in July.Aurangzeb said over the past 18-24 months, any backlogs related to import letters of credit, import contracts, and dividend and profit remittances have been cleared.

Inflation, which peaked at 38 per cent at one time, has now decreased to 9.6 per cent in August. “With this decline, we can expect a reduction in policy rates as well,” he said.Fitch and Moody’s have also upgraded Pakistan’s credit rating by one notch, a good sign for the economy.