Rupee strengthens

The rupee strengthened against the dollar in the interbank market on Wednesday, dealers said. The rupee closed at 159.82 per dollar, compared with Tuesday’s close of 160.05.

Similarly, the rupee gained 20 paisas to end at 160.30 against the greenback in the open market. Dealers said the expectations of monetary easing during this fiscal year boosted investor sentiment.

The State Bank of Pakistan raised the policy rate by 100 basis points to 13.25 percent due to upcoming price pressures from utility tariff revisions and exchange rate adjustment. The Monetary Policy Committee believes that adjustment on interest rates and exchange rate from previously accumulated imbalances has been done, a report from Alfalah Securities said.

The SBP’s revised economic growth and inflation forecasts are more encouraging than IMF’s projections, and the central bank expects inflationary pressures to sizably subside in the second half of FY20 which can provide ground for beginning of monetary easing, it added.

Data issued by the State Bank of Pakistan (SBP) showed that the current account deficit was $13.587 billion in July-June fiscal year 2019, compared with $19.897 billion in the preceding year.