Rupee likely to remain stable

The rupee is likely to maintain the current levels next week due to persistent support of the central bank in the interbank market, analysts said on Saturday.

“We think the domestic currency will continue to hover at 110.57/110.58,” an analyst said.

“There is a scope for weakness in the rupee, but it won’t breach the current support levels, despite emerging dollar demand. The State Bank is likely to maintain the rupee at 110.57/110.58 in the near-term.”

The rupee didn’t see any variation in its value against the dollar during the outgoing week.

The rupee posted losses in the open market in the outgoing week due to supply constraints. It fell to 112/112.30 to 111.50 and 111.75/dollar.

The recent decision of the Financial Action Task Force (FATF) to place Pakistan in its grey list in June could hurt investors’ sentiment.

Pakistan needs to improve anti-money laundering and combating the financing of terrorism laws, as the global watchdog fears the country’s financial system will pose a risk to the international financial system.

The Pakistan government will work with FATF to build an “action plan” to plug the deficiencies identified by the watchdog, which will be put up for approval by consensus in the June session. After that, implementation of the plan will begin, monitored by the Asia Pacific Group, a part of the global FATF network.

Pakistan’s balance of payments position continued to deteriorate. The current account deficit widened 48 percent to $9.156 billion in the seven months of the current fiscal year.