Rupee may gain

The rupee managed to post marginal gains against the dollar during the outgoing week due to lacklustre dollar demand from importers and exporter dollar conversions.

Dealers said the rupee is expected to gain some grounds in the coming week, helped by insignificant demand and positive sentiment.

“The rupee is likely to trade at 155.90 and 156 over the next week,” a dealer said.

The rupee gained 19 paisas versus the greenback in the interbank market in the outgoing week.

Financial markets were closed on September 9 and 10 (Monday-Tuesday) for Ashura holidays.

The rupee closed at 156.30 against the greenback on Wednesday, compared with the previous closing of 156.32.

The rupee traded stronger on Thursday and ended at 156.18 to the dollar. The currency concluded the week by trading at 156.19 against the greenback.

Currency market dealers said on Saturday the local currency stayed flat, as cautious investors remained on the sidelines ahead of the monetary policy announcement by the State Bank of Pakistan on Monday.

Investors were awaiting the outcome of the monetary policy announcement.

Most analysts expect the State Bank of Pakistan to keep the policy rate unchanged at 13.25 percent, while some see a 25 basis points cut in the rate.

“If the State Bank of Pakistan reduces the policy rate, then it would improve the market sentiment,” a dealer said.

The country’s foreign exchange reserves increased to $15.751 billion during the week ended September 6 from $15.619 billion in the previous week.

The foreign exchange reserves held by the State Bank of Pakistan (SBP) increased by $182 million to $8.462 billion. However, the forex reserves of commercial banks fell to $7.289 billion from $7.339 billion.

Remittances from Pakistani workers abroad fell 17.11 percent to $1.690 billion in August 2019 from $2.039 billion in the previous month. Workers’ remittances remained at

$3.730 billion during the first two months (July/August FY20), compared with $4.071 billion recorded in the same period of the last year.