Rupee weakens to 222 per dollar in kerb market

KARACHI: The local currency fell 3 rupees to close at 222 against the dollar in the open market on Thursday, dealers said.

The rupee finished at 219 per dollar on Wednesday.

Dealers said the rupee erased the previous session’s gains due to weak supplies.

“The dollar scarcity has caused pressure on the currency in the kerb market. Customers aren't coming to the market to sell dollars, which is affecting the supply of dollars,” said Zafar Paracha, the general secretary of the Exchange Companies Association of Pakistan.

The smuggling of dollars, mostly from Peshawar, has raised dollar rates in the grey market, which has once again been active, according to Paracha.

In the interbank market, the rupee ended slightly stronger at 218.60 to the dollar, compared with 218.75 in the previous session.

Following the government's lifting of the import prohibition on non-essential luxury goods, the interbank market is also under strain due to import payments, said another dealer.

“In anticipation of a stable exchange rate in the coming days, exporters have limited the selling of dollars in forwarding,” he added.

On Wednesday, the State Bank of Pakistan received a $1.16 billion loan installment from the International Monetary Fund (IMF) under the Extended Fund Facility, but the market didn’t react to it. The IMF deal and its disbursement had already been factored in by the investors.

The investors are more concerned about the economic fallout of the catastrophic flood that has killed 1,100 people in Pakistan