Rupee falls for second consecutive session in interbank market

KARACHI: The rupee continued its downward trend against the dollar for the second consecutive session in the interbank market on Tuesday, despite the release of positive economic data.

The rupee closed at 277.95 per dollar, a slight decline from the previous close of 277.85.

In the open market, the rupee also lost value against the dollar, trading at 278.88 per dollar, compared with 278.82 on Monday.

Dealers noted that the local currency continued to weaken even though the current account balance recorded a surplus for the third consecutive month in October. Pakistan posted a current account surplus of $349 million in October, bringing the cumulative surplus from July to October to $218 million.

“This [current account surplus] turnaround achieved despite normal import levels without significant administrative controls, reflects an improvement in remittances and a gradual recovery in exports,” said Chase Securities in a note.

“The current account surplus is a critical factor in stabilising the exchange rate and controlling inflation, while also boosting confidence in the country’s economic outlook,” it added.

The real effective exchange rate (REER), which shows the competitiveness of the local currency against trading partners, increased to 100.86 in October from 98.64 in the previous month.