Thursday February 29, 2024

Rupee strengthens on dollar supply, current account hopes

By Our Correspondent
December 06, 2023

KARACHI: The rupee rose for a sixth straight session on Tuesday, supported by improved dollar inflows and expectations of a current account surplus in November due to lower imports.

The rupee closed at 284.38 per dollar in the interbank market, up 0.05 percent from its previous close of 284.53, dealers said. It also gained 25 paisas against the greenback in the open market, where it was quoted at 285.25 for selling, compared with 285.50 on Monday.

Dealers said the rupee was buoyed by better dollar supply from exporters and remittances, which offset the demand from importers and debt repayments. They also said the rupee was helped by the anticipated improvement in Pakistan's balance of payments, which posted a current account deficit of $1.47 billion in October, the highest in four years. 

A money changer is seen holding curency notes of Pakistan and US dollars. —APP/File
A money changer is seen holding curency notes of Pakistan and US dollars. —APP/File

"International oil prices are experiencing a downward trend, and recent trade deficit data suggests controlled imports, raising the possibility of a marginal current account surplus this month," Chase Securities said in a note.

However, Pakistan’s inclusion in the International Monetary Fund’s (IMF) executive board schedule is delayed until mid-December, hindering the approval of the staff-level agreement (SLA) and the disbursement of $700 million. "The focus is now on the awaited IMF tranche, though recent headlines indicate that the country is not currently on the IMF Executive Board Meeting agenda," Chase Securities said.