The local currency market remained stable despite depleting foreign exchange reserves due to increasing external debt servicing obligations last week.
The market saw muted reaction to the Financial Action Task Force’s decision to place Pakistan on the grey list. The global financial system watchdog asked Pakistan to address the strategic deficiencies in the country’s compliance with the standards of anti-money laundering and terror financing.
Dealers expect the rupee to maintain a stable trend next week due to the absence of triggers and normal dollar importer demand. “We foresee a status quo in the dollar / rupee rate next week,” a forex dealer said. “The rupee is likely to trade at 121.50/121.55/dollar.”
The rupee showed minor changes and moved in a narrow range because of easy supply of the dollars. The local currency gained five paisas against the dollar in the interbank market during the outgoing week.
The rupee / dollar parity traded in a very narrow range of 121.50 on Monday. Extending previous session weakness, the rupee lost four paisas to close at 121.54 on Tuesday.
Amid lack of interest by market participants, the local currency did not show any variation and continued to trade flat on Wednesday and Thursday. The outgoing week concluded on a positive note with the rupee trading slightly higher at 121.49 against the dollar on Friday.
In the open market, the currency strengthened against the dollar. It closed at 124.50/dollar on Monday, while ended the week trading at 123.38. The country’s foreign exchange reserves fell 3.30 percent to $16.243 billion during the week ended June 22. The reserves held by the State Bank of Pakistan decreased $602 million on a weekly basis. The SBP’s reserves stood at $9.662 billion.