Rupee appears to gain stability

KARACHI: Rupee inched up on Wednesday to close at 110.52 against the US dollar – the level that currency traders see as stable after its constant beatings in the previous three sessions.

Rupee traded as low as 110.75 during the intraday session. The local currency ended at 110.63 in the interbank foreign exchange market on Thursday. Traders said rupee settled against dollar ‘by and large’ as the concerns over further depreciation have been allayed.

“The market is stable and volatile currency moves appear to be easing as the central bank has hinted at no more currency depreciation on its radar at least in near-term,” a trader said.

State Bank of Pakistan Governor Tariq Bajwa said the exchange rate came ‘closer to the equilibrium’. The currency movement was a response to the challenge of current account deficit, he said, speaking at a meeting on Tuesday.

Pakistan's current account deficit soared to $5.01 billion in the first four months of the current fiscal year of 2017/18 as compared to $2.26 billion in the corresponding period a year earlier. Analysts said rupee, which has mostly traded in a tight range of 104-105 per dollar since December 2015, shed over five percent in the past three sessions as the central bank decided to let the currency find its equilibrium based on demand and supply.

They said the depreciation was in line with the demand of International Monetary Fund (IMF), which held meetings with Pakistan’s officials as part of its post program monitoring. Another currency trader said the IMF meetings have concluded. “So, we can see range-bound currency moves in times to come.”

The rupee traded at 110/11 against dollar in open market.