Rupee inches up

The rupee strengthened on Wednesday, amid fewer import payments and increased dollar supplies, dealers said.

The local currency closed at 154.52 against the greenback, compared with the previous closing of 154.60 in the interbank market. The rupee; however, remained firmer at 154.90 against the dollar in the open market.

Dealers said the local unit posted slight gains due to weak dollar demand from importers. “We saw less import payments today,” a dealer said. “The rupee has also been supported by increased foreign inflows, higher workers’ remittances, strong foreign currency reserves and reduction in the current account deficit.”

However, foreign debt and import payments are expected to start next month so there could be some pressure on the currency, he added.

Pakistan attracted foreign investment of over $500 million in Treasury bills last week. This took the total Special Convertible Rupee Account (SCRA) share in bonds to $2.2 billion.

Pakistan’s current account deficit narrowed 75 percent to $2.153 billion in the first six months of the current fiscal year.

Foreign direct investment into Pakistan jumped 68.3 percent to $1.340 billion in July-December FY20.

The foreign exchange reserves held by the State Bank of Pakistan rose to $11.586 billion as of January 10 from $11.503 a week ago.