High demand for the US dollar kept Pakistan’s rupee under pressure with the local currency falling near the 212 level in the inter-bank market on Tuesday.
During intra-day trading, the currency was being quoted at 211.99, a fall of Rs2.03 against the greenback.
On Monday, the local currency finished with a loss of Rs1.21 or 0.58% to close at 209.96 to the dollar, as uncertainty around the International Monetary Fund’s (IMF) bailout programme and falling foreign exchange reserves continued to take a toll.
“There is a lot of pressure owing to import payments, leading to increase in demand for dollars,” Tahir Abbas, Head of Research at Arif Habib Limited, told Business Recorder.
“Demand is high, whereas the central bank is calling for delay in LCs,” he informed.
Meanwhile, Finance Minister Miftah Ismail on Monday expressed optimism that the IMF programme will be revived in the next 24-48 hours, as the government looks to pacify its currency market that has seen the rupee plunge to record lows in recent days.
Abbas said that the announcement by the Fund in coming days would ease pressure on the local currency. “The announcement would also pave way for other creditors to release their funds to Pakistan,’ he said.
On the other hand, other market analysts urged the State Bank of Pakistan (SBP) to take more measures in arresting the decline of the rupee.
“The rupee is under severe pressure,” Asad Rizvi, ex treasury head at Chase Manhattan Bank, tweeted on Tuesday.
“Apart from economic factors, an independent SBP, (which was) supposed to bring greater stability, is quiet,” said Rizvi.