The rupee is likely to maintain its current levels against the dollar next week, owing to lacklustre demand for import and corporate payments, dealers said on Saturday.
The dealers; however, said rising international oil prices and depleting foreign exchange reserves of the country may pose challenge to the exchange rate stability.
Currency analysts said international oil prices were increasing and the market was anticipating the oil price at $100/barrel. “Pakistan is a net importer of petroleum products,” an analyst said, adding that price hike would badly impact the country’s economy. The international oil prices hit four-year high at $78/barrel during the outgoing week after a plan of the US to reintroduce sanctions against Iran.
The import of petroleum group sharply increased 32 percent to $10.22 billion during July–April 2017/18 as compared to $7.75 billion in the corresponding period of the last fiscal year.
On the other hand, the foreign exchange reserves of the country were depleting gradually due to repayments and higher imports. The reserves eased to $17.28 billion by the week ended May 4, 2018. The stagnant growth in inflows of remittances also made currency experts jittery. They said the slowdown in inflows from Saudi Arabia was a major concern at the external front. However, experts are optimistic on better external position on the back of exports growth. They said exports had started getting momentum and witnessed a growth of 14 percent during the first 10 months of the current fiscal year.
During the outgoing week (May 7-11), the rupee remained stable at 115.62 against the dollar. The experts expressed the hope that the present government, which is completing its tenure by the end of this month, would maintain the current rupee level.