Rupee inches up

KARACHI: The rupee closed slightly higher against the dollar on Wednesday on subdued dollar demand from importers and better supplies, dealers said.

In the interbank market, the local unit ended at 283.20 per dollar, compared with Tuesday’s close of 283.92. The local unit appreciated by 0.25 percent on a day-on-day. However, the domestic currency lost 50 paisas to finish at 86 per dollar in the open market.

“Exporters sold dollars, which helped the rupee appreciate. However, the demand for the greenback from importers remained low,” said a currency dealer. "The outlook of the currency is still uncertain until any positive news on the IMF program front comes out, but we anticipate the rupee to trade range-bound in the coming days," the dealer added.

Yet, the government is still battling to secure a bailout deal from the International Monetary Fund. The IMF said Pakistan has made “substantial progress” toward meeting policy commitments needed to unlock loans the country needs to avoid default. However, in order to sign the staff level agreement and release the next tranche of around $1.2 billion, the IMF has asked Pakistan to secure assurances from countries that have promised financing support.

According to the IMF's top official in Islamabad, the lender was not consulted before the government recently announced a fuel subsidy and that it was looking for “greater details” on the plan.

Over a decline in international oil and other commodity prices, analysts forecast that the nation's economy will see some relief. As a result of the drop in oil prices, the country's import bill will go down and contribute to reducing the current account deficit further.