Import payment pressure weighs rupee down by nearly Re1

• Rupee closes at 220.68 against dollar.
• Currency snaps gaining streak due to import payment pressure.
• Analyst says currency to consolidate between 215 to 220.

KARACHI: The Pakistani rupee lost nearly Re1 against the dollar in the interbank market after coming under pressure due to import payments and political uncertainty.

The local currency was gaining ground against the greenback in the last three consecutive sessions and gained Rs1.1 and was trading below 219.

The rupee closed at 220.68 after losing Rs0.95, or 0.43%, against the greenback in the interbank market compared to Tuesday’s close of 219.73. 

Commenting on the rupee’s movement, Arif Habib Limited’s Head of Research Tahir Abbas told Geo.tv that the local unit is facing a “little pressure” in the interbank market. 

He said that it seems like Pakistan has received funding from the Asian Development Bank (ADB) and the foreign exchange reserves stand in a better position. 

“Most likely, allocation of $2 billion in funds from the World Bank will be received in November or December,” he said, adding that the International Monetary Fund’s (IMF) review scheduled in November will provide some relaxation and some targets will be eased up. 

He further added that Prime Minister Shehbaz Sharif’s visit to China next month is expected to tap into new investment opportunities and there might be talks about rescheduling. 

“This is a daily basis depreciation, however, the currency will consolidate between 215 to 220,” he added. 

Speaking to Geo.tv, Pakistan-Kuwait Head of Research Samiullah Tariq said that the rupee movement is market-determined, so the supply drives the demand. 

He added that there is a bit of pressure from the imports and the political uncertainty impacted the currency. 

Tariq maintained that the market depended on the ADB’s funds and that it would reverse the impact. However, according to the recent government system, the number of dollar outflows will be the same as inflows. 

He added that the effect of backlog from the two-three days can be seen on the parity.