Rupee declines

KARACHI: The rupee ended weaker against the dollar on Wednesday, as some banks bought greenback, amid fresh demand for the US currency from corporates, dealers said.

The rupee closed at 160.05/dollar, compared with the previous closing of 159.65 in the interbank market. In the open market, the local currency also lost grounds to end at 160 against the dollar. On Tuesday, the local unit had finished at 159.80 versus the greenback.

Dealers said two major banks purchased dollars to meet the demand emerged from some companies for payments.

Further, the central bank, against the expectations of the market, hasn’t made a fourth slash in the interest rate so far. This has led to the decline in the rupee’s value during the latest session.

Sentiment was also hurt by the gloomy foreign trade figures for April. Trade deficit widened 42 percent to $2.1 billion in April from $1.5 billion in the previous month.

The increase in the trade gap was due to a slowdown in exports, owing to the coronavirus outbreak. However, market participant were encouraged by the hopeful signs about the easing of coronavirus pandemic lockdown and reopening of businesses. The rupee is expected to post mild losses at 160 to 161 against the dollar in the coming days, dealers said.