Rupee stable

The rupee maintained its overnight levels against the dollar in the interbank market on Wednesday, dealers said. The local currency closed at 155.36 against the greenback, unchanged from the previous close.

The local unit; however, gained 10 paisas to end at 155.40/dollar in the open market. It had settled at 155.50 in the previous session. Currency dealers said the rupee followed a range-bound trading pattern due to dull trading activity. “The improvement in the latest economic data lifts sentiment, adding gains to the currency,” a dealer said.

The current account balance posted a surplus of $99 million in October against the deficit of $1.280 billion in the same month last year. The deficit narrowed to $1.747 billion in July-October fiscal year 2019/20 from $5.567 billion a year ago. The contraction in the October’s current account numbers is mainly due to falling imports and increase in exports.

The sets of policy actions such as exchange rate devaluation, monetary tightening and fiscal contraction led to an improvement in the current account balance. Analysts expect the central bank to keep the policy rate unchanged at 13.25 percent at its review meeting on Friday, despite a significant improvement in the balance of payments.