Rupee may stay flat

The rupee maintained its upward trend against the dollar in the currency market, amid lethargic dollar demand from importers.

The memoranda’s of understanding amounting to $20 billion signed by the Saudi Crown Prince Mohammad Bin Salman during his visit to Pakistan boosted investors’ optimism. However, the ongoing geo-political tension between Pakistan and India offset the positive sentiment. The rupee commenced the week on a positive note, gaining 11 paisas against the dollar at 138.72. However, it weakened to 138.92 in the second trading session due to payments pressure.

The currency was little changed on Wednesday, closing at 138.89/dollar. Getting a lift from increased supplies as a result of dollar selling by banks, the rupee gained another 27 paisas and closed at 138.62 against the greenback. The rupee / dollar parity continued to strength and ended at 138.54 against the dollar on Friday.

In the open market, the rupee traded in the range of 138.90 to 139 to the dollar.

Investors are focused on the euro-dollar exchange rate, which remained stuck in its recent range.

Traders say the forex market presently is moving through a demand and supply mechanism. “We expect the rupee to remain stuck in recent ranges unless there is a significant demand from importers,” a trader said.

The country’s foreign exchange reserves declined. The forex reserves held by the State Bank of Pakistan fell $163 million to $8.043 billion as of February 15.

Total liquid forex reserves of the country fell to $14.794 billion from $14.895 billion.