islamabad: Rupee took a hit against the dollar on Monday as the local currency depreciated by more than Re1 in the interbank market. According to the State Bank of Pakistan (SBP), the rupee closed at Rs297.13 against the dollar compared to Friday’s close of Rs295.78. The local currency depreciated Rs1.35 or 0.45% against the greenback. Capital market expert Saad Ali told Geo.tv that blamed the news of the current account deficit in July after four months of surplus and “lack of any new positive news on external inflows” for the rupee’s depreciation. “I think the pressure on the PKR may be coming from the backlog of external payments now that all import restrictions have been removed on the International Monetary Fund’s urging,” he added. The News had reported a day earlier that traders were fearing that the Pakistani rupee is expected to remain under pressure during this week due to an increase in dollar demand as a result of the clearing of import backlogs and dividend payments. Fears that the caretaker administration will be in place for a long time and that this year’s elections may not be held as planned are likely to weigh on sentiment towards the rupee, the publication reported.
The rupee fell by 1.46% last week against the dollar in the interbank market. The rupee’s value against the dollar was 291.51 last Monday, but it fell further to end the week at 295.78 on Friday.
“The rupee is expected to continue to decline in the coming days due to the demand for dollars created by the release of delayed import and dividend payments,” a foreign exchange trader told The News.
“The import restrictions have been eased in line with the requirements of the International Monetary Fund. There was a backlog of payments before the IMF’s stand-by arrangement because there were not enough foreign exchange reserves,” the trader added.
