Rupee may remain flat

The rupee traded almost steady in the local currency market during the outgoing week amid sluggish dollar demand.

The rupee depicted minor changes and lost four paisas against the dollar in the week under review. The currency closed at 133.95 against the dollar. It concluded the week on a negative note by trading at 133.99.

In the open market, the rupee traded at 134.20/30 against the greenback.

Traders expect the rupee to maintain the current levels over the next week. However, IMF approval of the new deal along with materialisation of $3 billion inflows from Saudi Arabia will determine the forex exchange market in the coming week, traders said. A report issued by Topline Research said that after confirmation by a Saudi envoy that the kingdom would release $3 billion (part of $6 billion package) to Pakistan in the next few days, investors’ confidence was rejuvenated. “Further, modalities of Chinese assistance to Pakistan are being worked out, as experts from both the sides are in contact to formalise the details of the package, which also elevated investors’ confidence,” the report added.

The government is scheduled to start holding policy level discussions with the IMF staff mission for the new bailout package next week. These discussions would finalise terms and conditions of the potential programme, such as size, tenure and disbursement mechanism.

Investors were also upbeat about the prospects of the country’s balance of payments.

The current account deficit fell 4.57 percent, or $232 million, in the first four months of the current fiscal year helped by lower trade gap in goods and higher remittance inflows.