Rupee's downslide deepens as dollar remains in demand

• Dealers say no letup in dollar demand from importers.
• LCs up to $100,000 expected to be cleared by end of week.
  
• Governor SBP forex reserves statement fails to calm investors.

KARACHI: Pakistan rupee further weakened against the dollar on Wednesday in the interbank trade owing to increasing demand from importers, who are currently on a payment-making spree these days.

The local unit lost 0.22% or Re0.50 to close at 222.41 from Tuesday’s close of 221.91/dollar.

According to money dealers, there has been no letup in the dollar demand that caused the rupee to remain under pressure, while a thin foreign exchange reserves cover coupled with political mayhem also continues to undermine the general outlook.

“Rupee might face more losses as the LCs (letters of credits) worth up to $100,000 were expected to be cleared by end of this week”, a currency dealer said.

State Bank of Pakistan Governor Jameel Ahmad’s statement that the country had sufficient forex reserves to meet the foreign payments didn’t soothe investors’ nerves, dealers added.

The governor said investigations against the commercial banks involved in the exchange rate manipulation would be finished this month.

“The central bank would take necessary regulatory action against the banks,” he stated.