Rupee tad lower

The rupee was little-changed against the dollar in the interbank market on Tuesday, dealers said. The local currency ended at 154.98 to the dollar, compared to Monday’s close of 154.96.

However, it gained grounds in the open market due to slowdown in demand for foreign exchange, rising 20 paisas to close at 154.70 to greenback. Dealers said ample supply of dollars in the market, improved macroeconomic fundamentals, and positive reviews on the country’s economic outlook by international rating agencies supported the currency.

Moody's Investors Services recently upgraded Pakistan's outlook from negative to stable along with the ratings of five major banks. Inflows from Asian Development Bank (ADB) are also expected to strengthen the prospects of balance of payments.

State Bank of Pakistan on Tuesday received $1.3 billion from the ADB in connection with the policy-based lending committed by multilateral lender to support Pakistan's budget and energy sector reforms. With this inflow of foreign currency, the central bank's foreign exchange reserves have swelled to over $10 billion.