The Pakistani rupee fell by Rs1.35 against the US dollar during interbank trade on Monday, extending its losses from the previous week.

The local currency closed at Rs297.13, rising by Rs1.35 from the last week’s close of Rs295.78, according to data shared by the Exchange Companies Association of Pakistan (ECAP).

In the open market, the dollar was changing hands for Rs307.

According to Khurram Schehzad, the chief executive of financial consultancy firm Alpha Beta Core, imports were opening up gradually and letters of credit (LCs) were being retired.

“Oil is also going up in the international markets and besides, we need to repay foreign debt as well,” he said.

Tresmark’s Head of Strategy, Komal Mansoor, was of the opinion that rupee depreciation was a “common outcome” of caretaker set-up.

“[It is] more so exacerbated now because of the current account deficit and payment of import backlog,” she said, adding that the market was bracing for the local currency to cross Rs300 against the greenback.

“But in our opinion, there is a material likeliness of an ad hoc hike in interest rates which may relieve some pressure on the rupee,” she told Dawn.com.

Zafar Paracha, currency dealer and secretary general of ECAP, said the week had commenced with pressure on the rupee and predicted that a similar situation would persist in the near future.

He blamed the losses on “mafias of speculation and manipulation”.

“We are moving away from reality and the country has been left at the mercy of these mafias,” Paracha told Dawn.com, adding that the Shehbaz Sharif-led government had left all matters to the caretaker set-up.

Referring to the restriction on the sale and purchase of foreign exchange for the public, he said that it seemed as if a “grey market” had been “deliberately developed, facilitated and promoted”.

“The earning in the grey market has skyrocketed to a point never seen before in the past 75 years,” Paracha stated. “It seems like contradictory government policies are creating this situation.”

He further said that there was both economic and political uncertainty in the country. “It is time we restructure, de-regularise and streamline things,” Paracha stressed.