Rupee ends higher against dollar

KARACHI: The rupee closed slightly stronger against the dollar in the interbank market on Monday.

The rupee ended at 280.17 per dollar, up from 280.22 on Friday. However, the rupee declined in the open market, trading at 281.98 against the dollar, compared with 281.95 in the previous session. Dealers said that the local unit rebounded from the losses of the prior session, as remittance inflows associated with Ramazan exceeded the dollar demand from importers.

The rupee is expected to trade within narrow ranges as the International Monetary Fund (IMF) concluded its first review of the $7 billion bailout last week. However, the staff-level agreement (SLA) remains unsigned as discussions continue on certain policy matters. Current negotiations with the IMF may create market anxiety as investors ponder the outstanding challenges to the accord; nevertheless, analysts suggest that no significant obstacles exist at present.

Once the SLA is signed, it will unlock a $1 billion tranche, along with climate resilience financing and other multilateral programs. Furthermore, a reevaluation of the country’s risk profile and improved access to external funding are anticipated in the future. The current account is expected to remain close to equilibrium for February and March.