ISLAMABAD: The rupee fell by Rs2.78 against the US dollar on Tuesday during interbank trade. According to the Exchange Companies Association of Pakistan, the local currency was changing hands at Rs291.27 during the afternoon from the previous close of Rs288.49.

The dollar was trading for Rs300 in the open market.

Currency dealer Zafar Paracha said that the rupee’s depreciation was “expected”. He said that the under the agreement with the International Monetary Fund (IMF), the difference between the open market and the interbank market should be 1pc.

Paracha went on to say that the caretaker set-up also had an effect on the dollar rate, as the outgoing government usually left difficult decisions to the former as it does not have a “political stake”.

The currency dealer expected that the rupee would “remain under pressure”. He noted that the government’s policies were in conflict with each other and called for undertaking structural reforms. “Our financial credentials are excellent. But our policies are (lacking),” he said.

The US dollar had hit 302 against the rupee in the open market on Saturday, going beyond the boundaries marked by the IMF to keep the difference in open and interbank exchange rates in the range of 1 per cent to 1.5 per cent.