Rupee ends higher

The rupee traded stronger on Monday due to the lack of large demand for the dollar from importers, dealers said.

The rupee closed at 156.41 against the greenback, compared with the previous closing of 156.53 in the interbank market. The rupee; however, lost slight grounds in the kerb market, as it closed at 156.80 against the dollar, compared with 156.70 in the previous trade.

Currency dealers said the market was dull because of insignificant dollar demand from importers and corporate firms. Investors were worried about the Financial Action Task Force evaluation report and the status of Pakistan.

Asia Pacific Group (APG) on money laundering has released its mutual evaluation report, which said that of the 40 recommendations given to Pakistan, the country has shown compliance to one factor “Financial Institutions Secrecy Law” and has shown non-compliance in four areas. However, Pakistan is partially compliant on 26 and largely compliant on nine recommendations.

“We believe the probability is high that Pakistan will remain on the “grey list”, as the government needs minimum of three votes to avoid falling in black list. Support from China, Malaysia and Turkey for the said matter is likely, we believe,” a report issued by Topline Securities said.

“In case of blacklist, the potential impact would be overall downgrade of the financial system of Pakistan and restrictions on its markets,” it added.