The rupee, which has been declining for nearly a week, fell by Rs2.76 against the dollar in the interbank market on Friday.

The PKR closed at Rs228.18 per dollar, depreciating 1.21 per cent from yesterday's close.

Mettis Global Director Saad bin Naseer said the exchange rate was under pressure because of payments and a demand-and-supply gap.

He added that the system would remain under pressure due to quarter-end payments. "Some oil payments were made this week. Besides this, the gap in [rates] between the interbank and open markets had widened significantly due to which bankers gradually increased the dollar rates.

"Remittances are slow, exporters [are] on hold, plus banks are quoting way higher bid prices to exporters and it's also the reason for panic," he elaborated.

However, there was no panic in the interbank market today and the greenback was available, he said.

Naseer suggested that the State Bank of Pakistan (SBP) increase the rates of Roshan Digital Account (RDA) to attract dollar inflows. "The momentum [of dollar inflows] has slowed because the RDA rates have not been changed compared to the US Treasury bonds," he commented.

Head of Research at Tresmark Komal Mansoor also said the difference between the interbank and open markets was increasing and pressure was building.

"Momentum is on the upside and increased import bill on account of food and other essentials will add to the pressure," she commented.

Mansoor said that according to a poll conducted by Tresmark, 35pc of analysts said they saw USD/PKR between 226-235 by the end of the current month.

Exchange Companies Association of Pakistan (Ecap) General Secretary Zafar Paracha said exporters had been holding their payments because of the wide difference in rates between the markets.

"Banks had been trying to control the rate for several days ... They have now started increasing their rate so it is expected that exporters will start releasing their payments."

Paracha also attributed the decline in the rupee's value to smuggling, saying the market had "never before seen smuggling on this scale". The greenback was being smuggled to Afghanistan and Iran, he said and called on the government to revisit its trade policies regarding the two countries.

He said that inflows from friendly countries, which were expected after the International Monetary Fund's deposit, had not been received yet while foreign governments were also not sending funds for flood relief efforts because of political uncertainty.

The Ecap general secretary warned that the situation may worsen in the coming days and called on all stakeholders to sit together to discuss how to bring economic stability.

The PKR has lost Rs6.82 from Sept 2-8, with the dollar becoming expensive by Rs4 in the last two days alone.

According to financial data and analytics portal Mettis Global, the local currency lost 25.62pc of its value against the greenback during the last 52 weeks.

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