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January 6, 2019

Rupee may remain flat

Business

January 6, 2019

The rupee maintained its stable trend during the outgoing week, supported by lacklustre dollar demand from importers. It traded in narrow ranges of 138.86/90 against the greenback in the interbank market.

However, the currency hovered at 139/20 against the dollar in the kerb market. The rupee is set to remain firm next week on low dollar demand from importers and the corporate sector. It is expected to trade at 138.85/90 aginst the dollar in the coming week, foreign exchange dealers said.

“The rupee is likely to get lift after Pakistan and the United Arab Emirates finalised $6.2 billion rescue package,” a dealer said.

The UAE’s crown prince is expected to announce a support package next week. That will include $3.2 billion worth of oil supplies on deferred payments and $3 billion cash deposits.

Investor sentiment is bullish about the currency. However, the potential outcome of the Financial Action Task Force meeting with the Pakistani delegation in Sydney next week to inform the action plan that the government wants to follow to exit from the Paris-based watchdog’s grey list, will also be watched.

Analysts believe the country needs IMF bailout despite financial pledges by friendly countries.

The latest announcement of external account support from Saudi Arabia, including $3 billion deferred oil facility in addition to the balance of payment support of $3 billion, provides the much-needed comfort. This raises expectations of similar support from China in the near term.

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