Rupee strengthens

KARACHI: The rupee ended stronger against the dollar in both the currency markets on Thursday, dealers said.

The rupee closed at 165.96 against the dollar, higher from the Wednesday’s closing of 166.22 in the interbank market.

The rupee ended at 166.15 against the greenback in the open market. It had settled at 166.30 in the previous session.

Dealers said the currency posted gains on the back of slowing demand from importers and corporates. Moreover, dollar inflows from Pakistanis working abroad also supported the local unit.

Analysts expect a gradual recovery in exports and remittances, and a stable outlook for the external account will keep the rupee stable in the near-term. Remittances remained resilient due to orderly exchange rate conditions, as well as supportive policy steps taken by the government and the State Bank of Pakistan under the Pakistan Remittance Initiative. The central bank’s foreign exchange reserves reached $12.7 billion as of September 18, which are sufficient to cover three months of import bills.

The SBP, in its latest monetary policy statement said the flexible market-determined exchange rate, introduced in May 2019, has played its valuable role as a shock absorber, as was witnessed in orderly two-way movement of the currency.