Rupee may stay firm

The rupee posted losses against the dollar during the outgoing week, as import payments weighed on the currency.

The local currency weakened by 19 paisas versus the greenback in the interbank market.

Dealers said the currency is likely to stick to range-bound trading over the next week due to positive macroeconomic news and general importers’ dollar demand.

On Monday, the rupee lost grounds to close at 156.36 to the dollar, compared with the previous closing of 156.17 due to corporate payments pressure.

The rupee ended unchanged at 156.36 against the greenback on Tuesday due to the lack of triggers.

The local currency; however, closed almost flat at 156.34 to the dollar in the third trading session.

The rupee maintained its firmness and closed at 156.36 on Thursday.

The currency ended weaker at 156.53 against the dollar on Friday.

In the open market, the rupee fell by 30 paisas to 156.70 against the dollar during the week under review.

Meanwhile, The country’s foreign exchange reserves remained on the declining path due to large foreign debt repayments.

The foreign exchange reserves dropped to $15.003 billion as of September 27 from $15.772 billion in the previous week.

The foreign exchange reserves held by the State Bank of Pakistan fell by $724 million to $7.741 billion.

The reports of floating sovereign bonds from the government may improve investors’ sentiment.

Pakistan is expected to attract foreign investment worth over $2 billion in sovereign debt instruments in the current fiscal year, as stability in the rupee-dollar parity and eight-year high benchmark interest rate have started attracting inflows after a gap of 25 months.

In the final Asian trade, the dollar stepped back on Friday after a soft US service sector survey stoked worries that pressure from US trade disputes with China and other countries could spill over into the broader US economy and tip it into a recession.

The dollar index fell to 98.905, shedding about 0.8 percent after hitting 2 1/2-year high this week.

Against the yen, the US currency eased to 106.91 yen, having fallen to one-month low of 106.48 in US trade on Thursday.