KARACHI: Pakistani rupee extended losses against the dollar for the fifth straight session as the demand for the US currency from the importers heated up owing to the opening of new LCs (letters of credit).
The local unit depreciated by 0.37% (Rs0.82) on a day-to-day basis to reach 219.71 in the interbank market, according to the State Bank of Pakistan (SBP), down in value from the previous close of 218.89.
The dollar also strengthened in the open market as the rupee lost 0.50 to close at 226.20.
Analysts have said that the local unit will remain rangebound in the ongoing week, depending on the demand for greenback by importers as the central bank has started to clear pending letters of credit.
Dealers believe that rising importer demand for the dollar was the reason the rupee reversed its previous trend of appreciation against the dollar. However, dollar conversions by exporters have decreased.
“There was still a demand for dollars to cover import bills, but exporters were hesitant to sell greenback in large amounts in advance. This led to a decrease in the market’s supplies of US currency,” a currency dealer told The News.
But the aid pledges from multilateral creditors to assist Pakistan to deal with the impact of the deadly floods would lead to a stronger currency, the dealer added.
“The market was concerned about the fast bleeding of the foreign exchange reserves,” he said.
The central bank’s foreign exchange reserves decreased by $303 million to $7.596 billion as of October 7 due to external debt repayments.
The central bank’s reserves are enough to cover hardly one month’s worth of imports.
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