Rupee closes weaker against dollar

KARACHI: The Pakistani rupee ended weaker against the US dollar in both currency markets on Monday.The rupee closed at 277.64 to the dollar in the interbank market, slightly down from 277.51 on Friday. The rupee slightly declined in the open market. It was trading at 279.69 per dollar, down from 279.66 during the prior session.

Dealers said that the local unit lost ground because of an increase in importers’ dollar demand, which typically rises at the beginning of the week.“As there are now enough dollars available on the market to satisfy importer demand, we expect the rupee to trade range-bound in the coming sessions,” a currency dealer said.

Foreign exchange reserves are increasing, the real effective exchange rate is consolidating, and import demand is declining, according to analysts, all of these are positive for the currency. Pakistan’s central bank’s foreign exchange reserves reached a two-and-a-half-year high as of September 27, following the receipt of the first instalment of a $7 billion loan from the International Monetary Fund (IMF).

The reserves held by the State Bank of Pakistan (SBP) surged by $1.168 billion to $10.7 billion, the highest since April 2022. The SBP’s reserves are enough to cover more than two months of imports. Last week, the SBP received $1.03 billion from the IMF as the first tranche of a $7 billion loan.