Rupee falls further against dollar

KARACHI: The Pakistani rupee extended losses for a second consecutive session in the interbank market on Tuesday.

The rupee closed at 277.67 to the dollar, slightly down from 277.64 on Monday.However, the local unit slightly strengthened in the open market. It was trading at 279.66 per dollar, down from 279.69 during the prior session.

Dealers noted that the local unit lost ground as a result of a boost in importers’ dollar demand, which usually occurs at the start of the week. They anticipate that the rupee would trade range-bound in the upcoming sessions because there are currently enough dollars available on the market to meet importer demand.

Foreign exchange reserves are increasing, 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.