KARACHI: The rupee ended weaker in the interbank market on Monday amid increasing dollar demand from banks and importers, dealers said.
The rupee closed at 166.98 against the dollar, compared with the previous close of 166.76. “The rupee is likely to remain under pressure, trading at 167 levels against the dollar in the coming days,” said a dealer. “Inflows in the form of remittances and exports remain thin due to coronavirus interference.”
Dealers said frequent foreign sales in the fixed income market also weighed on currencies and foreign exchange reserves. On the open market, rupees, however, manage to get. The rupee ended at 167 per dollar, up from the previous close at 168.
Traders also expressed concern about the decline of about $ 800 million in the central bank’s foreign exchange reserves. The possibility of delaying the release of the third tranche of $ 450 million to Pakistan from the IMF also damaged market sentiment, they added.
Pakistan State Bank’s foreign reserves fell to $ 11.185 billion in the week ended March 27 from $ 11.899 billion the previous week. Traders say multilateral loans and grants are expected to help stabilize the market and provide reserves for foreign exchange reserves.
Pakistan needs $ 3-4 billion in foreign financing to meet its balance of payments needs. The government’s plan to secure foreign inflows through the issuance of state bonds on the international capital market and the privatization of power plants is not possible due to the Covid-19 pandemic.
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