The rupee remained strong during the outgoing week, aided by investor sentiment that the greenback would benefit from the support package agreed with the United Arab Emirates to help stabilise economy and ease pressures on the balance of payments.
News about the Financial Action Task Force (FATF) satisfaction regarding Pakistani steps to curb money laundering also gave a small level of support to the rupee.
The currency traded in the range of 138.84/138.93 against the dollar in the interbank market. It hovered at 139/139.20 against the greenback in the open market.
Most forex dealers believe the currency will maintain present levels over the next week. However, the country’s next round of bailout discussions with the IMF would determine the actual direction of the exchange rate.
“We expect the rupee to move in the range of 138.70/138.90 until next round of discussions between Pakistan and the IMF,” a dealer said.
However, federal Finance Minister Asad Umar again denied rushing to the IMF programme. He said the government is exploring other avenues to build up the foreign exchange reserves.
Pakistan’s foreign exchange reserves dropped 1.74 percent, or $240 million, during the week ended January 4.
The forex reserves stood at $13.597 billion, compared with $13.837 billion in the previous week.
The foreign exchange reserves held by the State Bank of Pakistan declined $239 million to $7.048 billion, amid external debt servicing and other official payments.