Rupee rises for second consecutive session in interbank market

KARACHI: The rupee strengthened for the second straight session in the interbank market on Friday, thanks to some dollar selling from exporters.

The rupee closed at 278.50 to the US dollar, slightly higher than its previous close of 278.59.This was attributed to some dollar selling from exporters, which surpassed the demand for the US currency for import payments. Dealers noted that while there was a demand for the US dollar for import payments, the conversions from exporters exceeded the importer demand, resulting in the rupee gaining ground against the dollar.

In the open market, the rupee ended at 280.25 per dollar, unchanged from the previous close.Before the budget was announced, there was concern, according to Zafar Paracha, secretary general of the Exchange Companies Association of Pakistan, that the rupee would weaken to 295-300 versus the dollar in line with IMF recommendations.

“The market calmed down and uncertainty subsided following the budget presentation, which improved the supply of dollars available in the interbank market,” Paracha said.“Other than the US dollar, there isn't much demand for other foreign currencies in the open market.”

“The exchange businesses sold $425–450 million to the interbank market last month; this month, we anticipate maintaining or exceeding that amount,” he added.