Rupee ends lower against dollar

KARACHI: The rupee closed weaker against the dollar in the interbank market on Thursday.The rupee finished at 278.23 per dollar, a decrease from 278.16 in the prior session.According to dealers, year-end dollar demand from importers has caused the local currency to decline for the third straight session. Nevertheless, exporters’ dollar sales did not provide adequate supplies to satisfy that demand.

The rupee did, however, slightly improve in the open market, trading at 279.1 to the dollar, up from 279.11 the day before.The relationship between exchange rate stability and the performance of Pakistan’s stock market is a crucial indicator of the country’s economic health, according to a report from Ismail Iqbal Securities.

“Periods of dollar stability or reduced rupee depreciation often coincide with growth in the KSE-100 index, reflecting improved investor confidence and reduced economic uncertainty, the report said.

“When the PKR stabilises against the USD, it creates an environment of reduced uncertainty, leading to improved investor confidence in Pakistan’s equity market,” it added.This stability typically signals an easing of economic pressures, such as reduced imported inflation and better external account management, it said. However, significant rupee depreciation against the dollar often aligns with economic challenges such as rising inflation, higher debt servicing costs and declining purchasing power, all of which weigh heavily on the equity market, it noted.