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February 23, 2020

Rupee seen stable

Business

February 23, 2020

The rupee is likely to remain stable in week ahead on expected healthy dollar inflows and a lack of debt and import payments, dealers said on Saturday. “The rupee will hover around the current levels for the rest of the week in the absence of big dollar outflows,” a foreign exchange dealer said.

“We expect the currency to move in the band of 154.20 and 154.30/dollar in the coming sessions.”

Dealers said the lower current account deficit and the ongoing Saudi oil facility reduced the payments pressure in the interbank market.

Furthermore, increased financial flows via foreign portfolio investment also helped the rupee stabilise.

The local currency increased seven paisas to 154.20 to the dollar during the outgoing week in the interbank market.

Another dealer said ample supply of the greenback and positive sentiment about the outlook for the economy could help the local currency post nominal gains.

“The local currency is likely to gain four to five paisas more, if the dollar supplies remain healthy,” the dealer said. “The likelihood of further reduction in the current account

deficit due to further compression in imports and expected pick up in exports’ growth is also helping sentiment in the forex market.”

The current account deficit fell 72 percent to $2.6 billion in the seven months of the current fiscal year.

The foreign exchange reserves of the State Bank of Pakistan (SBP) increased $74 million to $12.504 billion as of February 14. Dealers said the Financial Action Task Force (FATF) decision to keep Pakistan in its grey list in response to an improve performance in the implementation of the 27-point recommendations on the anti-money laundering and combating financing of terrorism mechanism could also help support the local currency.

The Financial Action Task Force has kept Pakistan on the grey list till June 2020 to comply with the remaining conditions of its 27-point action plan.