Rupee extends losses as dollar rallies worldwide

• Rupee loses for second day.
• Dollar gains after Fed rate hike.
• Rupee seen struggling down the line.

KARACHI: The Pakistani rupee Thursday fell 0.23%, extending losses for the second day in the interbank market as the dollar staged a rally against world currencies after the US Federal Reserve’s hawkish rate move last night.

The rupee lost Re0.52 to close at 221.95. It had ended at 221.43 against the greenback on Wednesday after a loss of Re0.78 or 0.35%.

The country’s merchandise trade deficit for the first four months of the ongoing fiscal shrank 26.6% to $11.47 billion against $15.62 billion in the same period of last fiscal but not enough to arrest the rupee rout.

Another notable development was the State Bank of Pakistan (SBP) and Peoples Bank of China (PBoC) signed a Memorandum of Understanding (MoU) on establishing RMB (Chinese currency) clearing arrangements in Pakistan.

Moreover, Pakistan has signed two financing agreements of $500 million with the World Bank, including the “Punjab Resilient and Inclusive Agriculture Transformation Project” worth $200 million and the “Khyber Pakhtunkhwa Accessibility Project” worth $300 million.