Rupee continues to weaken against dollar as demand-supply pressure persists

KARACHI: The Pakistani rupee continued to weaken against the US dollar in the interbank market due to fluctuation in the demand and supply position of the greenback in the currency market.
According to the data released by the State Bank of Pakistan (SBP), the rupee closed at 219.86 compared to Friday’s close of 218.98 after depreciating by nearly Re1 or 0.40%.
Traders and dealers believe that the rupee seems to trade within a range of 218-19 in the coming days.
The currency move during the week will be influenced by importer demand and inflows [supplies] from exporters and remitters.
Last week, the currency largely remained stable as the market sighed in relief when a $1.16 billion loan tranche arrived after International Monetary Fund (IMF) revived a bailout package for a cash-strapped country.
However, the economic fallout from the devastating floods in the country and skyrocketing inflation will dent sentiment on the rupee.
The rupee’s movement in the open market also grabbed attention as the spread narrowed with rates in the interbank.
Analysts expect the rupee to come under some pressure as Pakistan moves to import a higher amount of essential commodities in the wake of floods in the country. However, many also believe that the demand could be suppressed, keeping the current account balance in check