Rupee falls for second consecutive session

KARACHI: The rupee extended losses for the second straight session against the dollar in the interbank market on Tuesday.

The rupee closed at 280.73 per dollar, compared with Monday’s closing value of 280.57.In the open market, the rupee stayed flat, trading at 281.96 against the dollar.

The local unit continued to lose ground as dollar demand from importers surpassed greenback selling from exporters and remittance inflows. Moreover, traders grappled with the economic and geopolitical implications of a trade war unleashed by the US reciprocal tariffs.

However, the rupee is unlikely to witness a significant drop in the coming sessions, despite the uncertainty surrounding trade tensions. Analysts believe that there has not been much of a direct effect of the global trade tensions on Pakistan’s economy. There is disagreement among experts over the severity of the adverse effects.

Some contend that this geopolitical shift may provide Pakistan new chances, particularly in trade diversion and enhanced competitiveness, while others predict a possible $2-3 billion harm to exports and remittances. Furthermore, some of the negative effects should be mitigated by the recent steep drop in the price of oil and other commodities.