Rupee stable

The rupee stayed flat against the dollar on Tuesday, amid routine dollar demand from importers, dealers said.

In the interbank market, the rupee closed at 156.36 against the greenback, unchanged from the previous close.

The rupee also held steady at 156.40 against the dollar in the open market. The currency was range-bound due to general importers demand and the lack of fresh triggers, dealers said. “We see the currency will continue trade in narrow ranges this week,” a forex dealer said.

State Bank of Pakistan Governor Dr Reza Baqir, in a lecture at IBA, said that a transition to a market-based exchange rate system brought a significant improvement in the current account, which had halved from its historic high of $2 billion monthly deficit.

He also said behind the improvement in the current account deficit was a reduction in imports and improvement in export volumes even though export values had grown less due to a fall in the international unit prices. “Ultimately what matters for employment and production is export volumes,” he added.

“If Pakistan is able to build institutions that entrench reserve buildup and preserve them during times of capital outflows it would allow Pakistan to self-insure against economic shocks and not have to seek assistance from the international financial community.”