Rupee likely to remain stable

The rupee is expected to maintain the current levels against the dollar in the local currency market next week, dealers said.

Traders see the rupee / dollar parity to show a stable trend in the interbank market in the wake of slowdown in the dollar demand from importers.

“The rupee could hover at 115.61/63 against the dollar in the week ahead,” a dealer said. The rupee remained unchanged at 115.61 during the outgoing week.

However, the domestic currency faced a major setback in the kerb market on sudden increase in the foreign currency demand. The rupee hit an all-time low of 117.70/dollar on Thursday amid panic buying by some people to invest undeclared money in dollar following the announcement of the amnesty scheme. A persistent shortage of the greenback led to fall in the value of the local currency. However, the rupee closed steady at 117.40 for buying and 117.70 for selling on Friday on easy supply of dollars. The weakening of the rupee in the open market pushed the official and open market exchange rates gap higher to Rs2.01. However, the spread between both the markets should not surpass Re1, as per the directives of the central bank.

Dealers expect the rupee to maintain a firmer trend in the open market in the coming week due to equivalent supply and demand for the dollars. The country’s foreign exchange reserves remained under stress due to staggering external current account. The foreign exchange reserves fell to $17.545 billion during the week ended April 13 from $17.639 billion a week ago.

The foreign exchange reserves held by the State Bank of Pakistan (SBP) dropped $58 million to $11.379 billion.

The current account deficit widened 50.55 percent to $12.029 billion in the nine months of the current fiscal year, as an increase in goods imports surpassed the rise in exports and workers’ remittances.