Rupee strengthens versus dollar

KARACHI: The rupee slightly increased on Friday as exporter dollar sales outpaced importer demand for the greenback, while positive sentiment surrounding Pakistan’s economy also helped.

The rupee finished at 279.05 per dollar in the interbank market, up from 279.15 on Thursday. In the open market, the rupee ended at 280.9 versus the dollar, unchanged from the previous close.

Dealers said the exporter dollar conversions and increase in the central bank’s foreign exchange reserves helped the local unit gain ground against the dollar. The SBP’s forex reserves increased by $46 million to $11.418 billion in the week ending January 31. However, the country’s forex reserves decreased by $8 million to $16.044 billion, and the reserves of commercial banks fell by $54 million to $4.626 billion.

The ongoing improvement in the external account, supported by increased remittances and exports, and the SBP’s dollar buying from the currency market supported forex reserves. Fitch Ratings said that Pakistan has made progress in restoring economic stability and enhancing external buffers. It forecasts economic growth at 3.0 per cent for the fiscal year 2025.

Progress on challenging structural reforms will be crucial for upcoming International Monetary Fund (IMF) loan programme reviews and sustained financing from other multilateral and bilateral lenders, according to a report by the global rating agency titled ‘Pakistan’s Progress on Structural Reform Remains Key to Credit Profile’ released on Thursday.