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Friday July 12, 2024

Rupee edges lower against dollar in interbank market

By Our Correspondent
July 03, 2024
A foreign currency dealer counts US dollars at a shop in Karachi on March 2, 2023. — Online
A foreign currency dealer counts US dollars at a shop in Karachi on March 2, 2023. — Online

KARACHI: The rupee remained largely unchanged against the US dollar in the interbank market on Tuesday.The rupee closed at 278.37 versus the dollar, compared with its previous close at 278.34.Dealers said the rupee ended slightly weaker on light dollar demand in the absence of export dollar conversions.

In the open market, the rupee settled at 280.20 per dollar, compared with 280.25 in the previous session.“We expect the rupee to stay at its current level in the coming sessions due to normal dollar demand from importers and optimism, fuelled by expectations that the International Monetary Fund will reach an agreement with Pakistan for a new bailout in July,” a currency dealer said.On Friday, Pakistan’s parliament passed the FY2024-25 budget. This development brings the country move closer to securing a fresh IMF programme. An IMF team is expected to visit Islamabad during the second week of this month to finalize the loan programme.

Topline Research, citing the State Bank of Pakistan’s data, said that foreign investment inflows into treasury bills (T-bills) increased to $444 million in the previous fiscal year that ended on June 30.

The investment reached a four-year high in May 2024.“With high interest rate and stable currency, Pakistan has attracted $57 million net dollar inflow into T-Bills through Special Convertible Rupee Accounts (SCRA) in Jun 2024 till 7th,” it said.

“In the month of May 2024, Pakistan attracted $230 million which is the highest monthly inflows after four years,” it added.“We believe, once Pakistan gets the new long-term IMF deal, chances are high that more of such funds will come to Pakistan to get high-yielding government papers, thereby providing short-term support to Pakistan foreign exchange reserves and currency.”