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December 4, 2020

Rupee gains

Business

December 4, 2020

KARACHI: The rupee recovered form losses on Thursday to end the sessions with marginal gains because of subdued dollar demand from importers, dealers said.

The rupee closed at 160.17 against the dollar, 29 paisas stronger from the previous closing of 160.46 in the interbank foreign exchange market.

The recovery in the domestic currency was highly expected by the traders and analysts.

“The local unit recovered from two-day losses, due to less dollar buying from importers, while supplies were also increased,” a currency dealer said.

In the open market, the rupee closed at 160.60 against the dollar, compared with the Wednesday’s closing of 160.80.

Dealers said the positive news on the vaccine front helped lifted traders’ sentiment.

Currency analysts agree that the 159 to 161 is an appropriate range for the rupee / dollar in the near-term given the current scenarios.

However, there are some factors, which can upset the equilibrium.

The virus surge and how it may impact exports, remittances and demand to determine the future course of the exchange rate, but there are others such as fiscal reforms, uninterrupted flow of liquidity, IMF and FATF could also come into play in terms of exchange rate moves.

Traders will also be closely watching the upcoming readings of the real effective exchange rate to determine the rupee’s future path.