The rupee continued to lose its value on Tuesday, closing near an all-time low of 233 against the dollar in the interbank market.

The local currency, which had closed at Rs229.88 yesterday, fell Rs3.05 to close at Rs232.93 today, according to the State Bank of Pakistan (SBP). This amounts to a depreciation of 1.31 per cent.

Mettis Global Director Saad Bin Naseer said the rupee hit a new intraday low due to letter of credit (LC) payments for oil at a time when the SBP was reluctant to release reserves to contain the exchange rate volatility.

"Furthermore, exporters seem more interested in earning windfall profits as they seem to have abandoned national interest in view of gaining quick earnings from rupee depreciation," he told Dawn.com.

On the other hand, Naseer pointed out, exporters were utilising maximum LC limits from banks.

"Any bank will tell you that exporters are currently using maximum limits for import LCs whereas they refuse to bring in dollar from export earnings."

He said that the only way for the government to address the situation was to mandate exporters to convert their transactions at the time of export so they could not continue holding on to the dollars.

"At the same time, the SBP can serve as an intermediary by doing swaps with banks so that the exchange rate can remain insulated from foul play of exporters at a time of crisis."

He said that exporters should focus on earning from the sale of their goods instead of fleecing the exchange rate.

Komal Mansoor, head of strategy at Tresmark, said that bank nostros — accounts that a bank holds in a foreign currency in another bank — were short by roughly $600 million.

"Exporters have parked their dollars outside and the SBP is not providing any liquidity. Some banks are now only opening fresh LCs if the expected outflow is matched by export proceeds of the same client," she said.

Rupee's consistent decline

Between April 7 (when the then-prime minister Imran Khan was ousted from power) and July 22, the rupee lost 21.3 per cent value against the US dollar both due to the yawning trade deficit and the growing political instability and uncertainty.

The rupee had appreciated to Rs204.56 in the first week of July after touching 211.93 on June 22. It then kept losing its value against the dollar but registered a minor appreciation when the country reached its staff-level agreement with the IMF on July 15.

It has continued to fall in every session since then.

Read: Is the rupee too weak to recover?

Last week, the rupee lost 8.25pc of its value against the US dollar within a week: it closed to an all-time low of 228.36 per dollar on July 22 from 210.95 per dollar on July 15.

In the opening session this week, the rupee further fell to Rs229.88.