Rupee strengthens

KARACHI: Rupee continued to trade stronger in the foreign exchange market on Friday helped by improvement in dollar supplies, traders said.

It ended the session at 150.91 per dollar, up 54 paisas from a previous close of 151.45 in the interbank market.

“The rupee shows strength as dollar inflows are enough to cater the demand,” a dealer said. “Investor optimism due to deferred oil facility by Saudi Arabia also helped stabilise the currency.”

However, investors were concerned about the government budget deficit target at six percent of gross domestic product for the next 2019/20 fiscal year ahead of an International Monetary Fund (IMF) $6 billion bailout package.

Many traders expect the rupee to trade at 150 per dollar over the next week. In the open market, rupee showed a sharp recovery, tracking the currency’s stronger dealing in the interbank market. The interbank market stability also lent support to the kerb market, where the currency closed at 151.70 against the dollar, up 80 paisas from Thursday’s close of 152.70.

However, the country’s foreign exchange reserve data issued by the central bank was dismal. The total reserves declined 4.83 percent or by $768 million to $15.126 billion during the week ended May 17, from $15.894 billion in the previous week.

The reserves held by the State Bank of Pakistan decreased by $788 million to $8.057.6 billion due to external debt servicing and other official payments.