Rupee falls against dollar on import payment relaxation

Rupee falls against dollar on import payment relaxation

Rupee falls against dollar on import payment relaxation

Rupee falls against dollar on import payment relaxation

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KARACHI: The rupee lost 25 paisas against the dollar on Tuesday, owing to mounting import payments demand after the State Bank of Pakistan (SBP) allowed import relaxation, dealers said.

The rupee ended at Rs230.40 against the greenback from the previous day’s closing of Rs230.15 in the interbank foreign exchange market.

The dealers said the rupee remained under pressure during the day due to higher dollar demand after the State Bank of Pakistan (SBP) allowed import relaxation.

On Monday, the central bank advised the banks to provide a one-time facilitation to all those importers who could either extend their payment terms to 180 days (or beyond) or arrange funds from abroad to settle their pending import payments.

“Accordingly, till March 31, 2023, the banks have been advised to process and release the documents of shipments and goods that had already arrived at a port in Pakistan or have been shipped on or before January 18, 2023,” the SBP added.

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However, the dealers said the hike in the interest rate failed to support the local currency.

A day ago, the SBP increased the interest rate by 100 basis points to 17 per cent to control inflation.

The rupee also witnessed pressure, as the local authorities failed to convince the International Monetary Fund (IMF) for the continuation of the loan programme under the Extended Fund Facility.

The IMF flow is necessary because other lending agencies believe that the IMF programme guarantees their funding.

The delay in the IMF programme also adversely affected the stocks of foreign exchange reserves of the country. The rupee fell to the all-time low level of Rs239.94 against the dollar on July 28, 2022.

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