Rupee ends higher

The rupee extended gains in the second consecutive session on Wednesday, aided by soft dollar demand for import payments and expectations of a positive outcome from the government authorities and International Monetary Fund (IMF) talks, dealers said.

In the interbank market, the local currency closed at 154.36 against the greenback, slightly stronger from Tuesday’s closing of 154.41.

The rupee ended firmer at 154.50 against the dollar in the open market. Dealers said lower import payments and positive sentiment regarding the successful completion of the IMF second review helped the local currency post gains.

“The rupee showed some strength because of easing payment pressure and the rupee seems to remain stable in the coming days,” a forex dealer said. “Any good news come from the IMF’s front could have positive effects on the rupee and the foreign exchange reserves,” he added.

Traders are optimistic that the IMF and the Federal Board of Revenue is likely to reach a consensus on the revenue collection target. The IMF mission and the government authorities are exploring possibilities to keep the petroleum levy up to increase the non-tax revenue. The successful review will enable the IMF to release the third tranche of $450 million loan.