The rupee fell by Rs1.05 against the dollar in the interbank market on Tuesday, according to the State Bank of Pakistan. The dollar closed at Rs303.05.

The development comes a day after the local currency hit a new low against the greenback, with experts demanding that the government take immediate measures.

They have also urged the government to take steps to overcome the big gap between rates of the dollar in the interbank and open markets.

According to the agreement signed with the International Monetary Fund, the government has assured the lender of keeping the average premium between the interbank and open market rate under 1.25%. The demand applies to any consecutive five business day period

In the international market, the dollar eased from a 12-week peak on Monday as traders weighed the US monetary path.

The foreign exchange reserves held by the State Bank of Pakistan declined by $125 million to hit $7.9 billion during the week ended on August 18, compared with $8.05 billion the previous week.

Meanwhile, the Indian rupee was little changed on Tuesday after surrendering its opening gains due to the dollar demand from corporates, traders told Reuters.

The Indian rupee was at 82.6325 to the US dollar by 10:46am IST, barely changed from the previous session. The currency had inched up to 82.5850 at the open.

(With input from Reuters)