Rupee declines

The rupee lost one paisa against the dollar in the interbank market on Monday, dealers said. The local currency closed at Rs154.57 against the closing of Rs154.56 on Friday. In the open market, the buying and selling rates of the rupee against greenback stood at Rs154.60 and Rs155.35, respectively.

Experts said the currency was likely to remain stable against the dollar in the days ahead, amid positive market sentiment; following optimistic response from the Financial Action Task Force (FATF) regarding removal of Pakistan from the ‘grey list’.

Reportedly, Pakistan had presented its case strongly and managed to satisfy the FATF working group. Outbreak of coronavirus in China reduced the oil prices internationally, which may also impact the Chinese imports to the international markets, as well as Pakistan.

According to the State Bank of Pakistan, $2.571 billion was invested by the foreign participants in Market Treasury Bills (MTBs) and Pakistan Investment Bonds (PIBs) during July 1, 2019 to January 23, 2020.

The inflows in debt securities are likely to increase due to attractive rate of returns. The SBP is scheduled to announce policy rate on January 28, 2020 (today) for the next two months. The present policy rate is 13.25 percent, and considering the inflationary pressure, the central bank is unlikely to review any downward revision.