Rupee may remain range-bound

The rupee is expected to remain range-bound next week in anticipation of the persistent demand for the dollars, analysts said on Saturday.

“Pakistan’s currency is expected to remain stuck in the narrow ranges of 110.30/40 on strong dollar demand,” an analyst said.

Furthermore, the premier had already ruled out any possibility of further devaluation,” the analyst said. “It’s unlikely to breach a key psychological level of 110 at least in the near-term.”

The currency pair remained under severe pressure and lost more than two percent in its value during the week. At the start of the week, the rupee slipped broadly. The continual devaluation by the central bank drove the rupee down to 109.25/dollar. It closed at 108.41 to the dollar.

The rupee fell for the third session on Tuesday after the State Bank of Pakistan withdrew its support and allowed the currency to plummet further. The rupee dropped another 2.23 percent and ended at 110.63 against the dollar.

The local currency unit managed to gain on Wednesday on verbal intervention from the State Bank. The SBP governor reportedly said that the exchange rate was “closer to the equilibrium” and the movement in it was in response to the widening current account deficit.

The rupee extended gains on Thursday, as exporters sold dollars amid stability in the market. It ended higher at 110.09 against the greenback.

However, an increased dollar demand pushed the rupee down at 110.43 at the close of the week.

In the open market, the rupee fell to 112 level on Monday. It posted gains in line with the stability in the interbank market. The rupee was traded at 110/111 during the week.