Rupee extends gains

KARACHI: The rupee ended stronger for a third consecutive session on Friday as fewer import payments and continued dollar inflows kept the pressure off the local unit, dealers said.

In the interbank market, the rupee closed at 166.21 per dollar, compared with Thursday’s close of 166.88. The rupee ended at 167 to the dollar in the kerb market. It had finished at 167.40 in the previous session.

Dealers said lesser import payments, increased foreign inflows, strong foreign exchange reserves position and a contraction in trade deficit were the reasons behind the rupee’s gain in value in recent days. A 14 percent month-on-month increase in exports in May also boosted market sentiments, they added.

“We expect the local unit to gain further, trading around 165 level against the greenback in coming days as there are no imports and debt repayments or outflows of dollars scheduled next week,” said a forex dealer.

The trade deficit fell to $2.123 billion in June from $2.650 billion a year ago and dropped 27.11 percent to $23.183 billion in the full 2019/20 fiscal year.

The central bank’s foreign currency reserves increased $1.270 billion to $11.231 billion as of June 26 after the multilateral lenders disbursed around $3 billion loans to Pakistan this week.

The COVID-19-led lockdown, halted industrial activity, resulting in lower exports and sluggish remittance flows from overseas Pakistani workers that put pressure on the exchange rate in the period under review.