Rupee resumes downward trend against dollar, falls to Rs170.74

• Analysts predict the local currency to trade within a range of 170-71 in the ongoing week.
• Currency dealers believe that the central bank will be concerned if the rupee breaches the 171 barrier.
• Experts say the direction of the rupee would rely on the resumption of the $6 billion IMF programme.

KARACHI: The Pakistani rupee started the week by resuming its downward movement against the greenback after a brief respite on Thursday last week.

The local currency recorded a decrease of 0.12% or 21 paisas to close at Rs170.74 in the inter-bank market on Monday.

The rupee had dropped to an all-time low of Rs170.96 at the beginning of last week before paring losses, as persistent higher dollar demand for import payments, the rising import bill, skyrocketing commodity prices, and the widening current deficit put pressure on the currency.

Commenting on the movement, a foreign exchange trader at a commercial bank said: “I anticipate we will see some sluggish activity on the demand side, and inflows are likely to balance the demand for the US currency from manufacturing and oil importers.”

However, the rally in the global commodity prices could exert pressure on the rupee, he added.

"The range for the rupee should be 170-71 in the ongoing week."

Currency dealers believe that the central bank will be concerned if the rupee breaches the 171 barrier, adding that it will result in higher prices of food products, general inflation and people paying more for imports.

Meanwhile, analysts told Geo.tv that the direction of the rupee would rely on the resumption of the $6 billion International Monetary Fund (IMF) programme.