The rupee weakened on Monday, closing at 278.7 per dollar in the interbank market, down from 278.56 in the previous session. The dip is attributed to higher dollar demand from importers and a slowdown in dollar conversion by exporters, according to market dealers.
In the open market, the rupee also saw a decline, trading at 281.03 per dollar, compared to 280.86 on Friday. Dealers noted that importers and companies were actively buying dollars, but the supply was limited as exporters were selling dollars at a slower pace.
Investor confidence has been impacted by the delayed approval of a $7 billion loan from the International Monetary Fund (IMF), according to Zafar Paracha, General Secretary of the Exchange Companies Association of Pakistan.
Paracha also highlighted that heavy rains in Sindh, Khyber Pakhtunkhwa, and Punjab have made it difficult for exchange companies to buy dollars, leading to a slowdown in inflows in the open market. He added that the grey market is becoming active again, with the dollar trading at 284 against the rupee in Peshawar. Authorities have started a crackdown to control grey market activity, which may help ease the pressure on the rupee.