Rupee weakens by Rs2 against dollar in interbank

The rupee weakened by Rs2.46 against the dollar in the interbank market on Tuesday amid waning euphoria surrounding the agreement with the International Monetary Fund (IMF).

According to data from the Exchange Companies Association of Pakistan (ECAP), the dollar was changing hands for Rs281.72 around noon. Yesterday it had closed at Rs279.26, according to the State Bank of Pakistan (SBP).

Recent inflows from the IMF, Saudi Arabia and the United Arab Emirates had changed the sentiments during last week but the dollar’s appreciation on Friday indicated the return of the greenback’s domination.

Currency dealer Zafar Paracha said that after the loan agreement with the IMF and the commercial loans from Saudi Arabia and the UAE, analysts had expected the dollar rate to fall by Rs2.

“But a hype was created, of manipulation and speculation,” he said, lamenting that the local currency was treated as a mere company at the stock exchange.

“As a result, local and foreign investors are disheartened which inevitably reduces investment and also degrades our [credit] rating,” he said.

He pointed out that Pakistan had several debt obligations for this year and next year and called for “acknowledging the truth”. He urged the authorities to constitute long-term policies and for restructuring existing ones.

More to follow.