Rupee likely to remain range-bound

The rupee saw minor variations against the dollar this week on insignificant demand from importers. Analysts predicted that the rupee could continue range-bound trading pattern and average at 110.56/110.58 next week in the absence of any major clue in the near-term.

“We expect the domestic currency to remain stable in the wake of Senate elections, which are being held on Saturday,” an analyst said.

“The smooth transition in electoral process could boost investors' confidence in the economy.

However, the country’s classification in a grey list by the Financial Action Task Force (FATF) sent some negative signals to the investors.

The government is working with FATF to build an action plan to plug the deficiencies identified by the watchdog, which will be put up for consensus approval in the June session.

The rupee / dollar parity stayed flat between 110.56/110.57 in the interbank market during the outgoing week, amid dull trading activity.

In the kerb market, the rupee managed to post modest gains against the greenback, as it was traded at 111.90/112.20 and 112.20/112.50 for buying and selling.

The foreign exchange reserves fell to $18.413 billion during the week ended February 23 from $18.828 billion a week ago.

The forex reserves held by the State Bank of Pakistan decreased $358 million to $12.346 billion, owing to external debt servicing and other official payments.

The foreign exchange reserves of commercial banks stood at $6.067 billion as compared to $6.125 billion in the previous week.