Rupee extends gains

KARACHI: The rupee rose for a third consecutive session in the interbank market on Monday due to sluggish dollar demand from importers.The rupee ended at 281.97 per dollar, compared with the previous close of 282.02.

In the open market, the rupee remained stable, trading at 284.4 against the dollar, unchanged from the prior close.Dealers said that the rupee gained slight ground, supported by soft dollar demand for import payments and Eid-related inflows.

With only three trading days remaining before the budget announcement, market players are closely monitoring news and developments related to fiscal policy. The federal budget will be unveiled first, followed by the monetary policy statement. Given these circumstances, the rupee is expected to remain range-bound as investors evaluate incoming data and policy signals. Ongoing attention to budget outcomes and macroeconomic indicators will influence the direction of the rupee in the near term.

In a surprising development, the Consumer Price Index (CPI) increased by 3.5 per cent year-on-year in May, above the finance ministry’s prediction of 1.5 per cent to 2.0 per cent.In April, annual inflation decreased to 0.3 per cent, the lowest rate in nearly a decade, a significant decline from 11.8 per cent in May 2024 and a record high of nearly 40 per cent a year earlier. The finance ministry’s monthly report said that inflation is projected to rise to between 3.0 per cent and 4.0 per cent in June.