Rupee rises to 278.87 per dollar in interbank market

KARACHI: The rupee closed marginally higher versus the dollar on Wednesday after recovering from losses in the previous two days. In the interbank market, the rupee ended at 278.87 to the dollar, up from 278.93 on Tuesday.

The rupee also strengthened in the open market, closing at 280.82 to the dollar, up from 280.91 the day before. Dealers said the local currency saw a little increase as dollar inflows from exporter conversions and remittances surpassed demand from importers.

Besides, the comments from Finance Minister Muhammad Aurangzeb that the government would stick to the commitments made with the International Monetary Fund (IMF) under the $7 billion Extended Fund Facility boosted investor sentiment. The IMF team is expected to visit Pakistan next month to evaluate the country’s economic performance. The first IMF review is scheduled for March.

Governor of the State Bank of Pakistan Jameel Ahmad said on Monday that the market determines the value of the national currency. Changes in the market’s supply and demand for dollars have an impact on exchange rates. He asserts that there is no market intervention by the central bank. The SBP works closely with law enforcement to prevent dollar smuggling, and it will step in if market mechanisms are abused, although this is not an issue at the moment.