Rupee gains on dollar sales

KARACHI: The rupee ended higher on Monday as exporter dollar sales surpassed demand for the US currency from importers, dealers said.

The rupee closed at 279.20 to the dollar in the interbank market, compared with 279.36 on Friday. The local unit gained 0.06 percent during the session. In the open market, though, the rupee slightly lost ground to the US dollar. The rupee was trading at 282.28 for selling, down from 282.23 in the previous session.

“The currency appreciated due to exporters' dollar sales and remittances,” said a currency dealer. Dealers said that exporters were selling dollars in forward because of the alluring premiums, which boosted the market's dollar liquidity.

Due to the holy month of Ramazan, dealers anticipate an increase in remittances during the next two weeks. This will increase the levels of dollar liquidity even more. But there will also be a rise in demand for cash for Umrah. In the near term at least, it is anticipated that the rupee would stay range-bound due to positive economic signals.

Pakistan has met the requirements set by the International Monetary Fund (IMF) to be eligible for the next $1.2 billion loan tranche, according to reports. The targets for the end of December, according to Ministry of Energy officials, were to halt the increase in line losses, raise power tariffs under different headings on time, and keep the flow of circular debt below Rs385 billion. All of these goals had been reached.

Under the second review of the $3 billion bailout package, the IMF would assess how these targets were being implemented throughout the loan discussions. The global lender is awaiting the government's formation and has not yet set the dates for the upcoming review negotiations.