KARACHI: Following a rise in demand for the dollar from importers, the Pakistani rupee on Tuesday fell against the US dollar for the fifth straight session. According to the State Bank of Pakistan (SBP), the local currency lost value daily, falling by 0.37% (Rs0.82) to reach 219.71 in the interbank market, down from the previous closing of 218.89. The dollar also gained strength, while the rupee fell 0.50 to end the day at 226.20.
The News reported referring to dealers, that rupee’s reversal against the dollar was due to increased importer demand for the dollar, and due to fewer dollar conversions by exporters, the rupee is weakening. There was still a demand for dollars to cover import bills, but exporters were hesitant to sell the greenback in large amounts in advance.
However, the aid pledges from international creditors to help Pakistan deal with the effects of the catastrophic floods would result in a stronger rupee. The rapid loss of foreign exchange reserves “was causing market worry,” a currency dealer said.
The external debt repayment caused a $303 million decline in the central bank’s foreign exchange reserves, which fell to $7.596 billion as of October 7, and in less than one month’s worth of imports can be covered by the central bank’s reserves.
