Rupee ends lower in interbank

KARACHI: The rupee closed slightly weaker against the dollar in the interbank market on Monday. The rupee ended at 281.07 per dollar, compared with the previous close of 280.97. In the open market, the rupee declined, trading at 282.78 against the dollar, down from 282.71 in the previous session.

Analysts note that the local currency has been volatile over the past month, despite record remittances, a current account surplus, and the depreciation of the US dollar against other major currencies. The rupee’s weakness is largely attributed to global market fluctuations triggered by new, steep US tariffs.

Additionally, the decline in foreign exchange reserves due to external debt repayments has weighed on the local currency. According to reports, the former finance minister, Dr Hafeez Pasha, said that the State Bank of Pakistan’s (SBP) practice of purchasing dollars from the market to stabilise the rupee-dollar exchange rate and bolster forex reserves is unsustainable. He argued that maintaining the rupee-dollar parity between 278 and 280 by procuring dollars from the market is not viable, as exporters require incentives. Furthermore, he emphasised that the government had made agreements with the International Monetary Fund (IMF) regarding this issue.