Rupee ends weaker

KARACHI: The rupee closed marginally lower on Monday as outpaced inflows from remittances and selling of the US currency by exporters pushed the local currency to end at 178.17 per dollar in the interbank market.

The rupee also lost ground in the open market trade due to weak supplies, closing at 181.20 to the dollar, 1.30 rupees down from Friday’s close of 179.90. According to dealers, importer dollar demand outpaced inflows from remittances and exporters were also seen selling the US currency.

“There was dollar demand from importers, especially from the energy sector. Usually, the appetite for the greenback goes up at the end of every month as importers and companies make their payments,” said a foreign exchange dealer.

The inflows from the remittances and exporters were not enough to meet the market demand, he added. Dealers expect the rupee to trade in a range-bound manner this week, but near-term outlook for the currency depends on completion of the sixth review of the IMF (International Monetary Fund) $6 billion loan programme next month.

The Fund’s executive board will approve disbursement of $1 billion tranche under the extended fund facility for Pakistan if the government is successful to meet the prior actions, i.e. parliamentary approval of two important bills; Tax Laws (Fourth) Bill and the State Bank of Pakistan’s Autonomy Bill. The revival of the IMF stalled programme is expected to unlock funding from other multilateral lenders and provide support to the local currency.