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Rupee slightly up

Business

January 21, 2021

KARACHI: The rupee recovered its lost ground to end marginally higher on Wednesday, helped by lower demand for the hard currency and healthy inflows, dealers said.

In the interbank market, the rupee closed at 160.50/dollar, compared with the previous closing of 160.61.

In the open market, the rupee; however, ended unchanged at 160.70 against the dollar. Dealers said the local unit recovered from the previous two sessions’ losses on the back of easing demand from importers.

“There were no heavy payments and the supply of the dollar was also smooth,” a foreign exchange dealer said.

Dealers said in addition to improvement in the supply of the US currency, positive sentiment ahead of Joe Biden’s inauguration as US president also supported the local unit.

“We expect the rupee to remain stable in the coming sessions,” the dealer said. “Traders are unlikely to take fresh positions ahead of the monetary policy announcement due on Friday,” he added.

Analysts and markets expect a status quo to be maintained in January monetary policy announcement.

The State Bank of Pakistan is likely to keep the policy rate unchanged at 7 percent for the next two months.

Topline Securities conducted a poll of topnotch financial market participants over their views on the upcoming monetary policy statement. Of the 94 participants, 75 percent expect no change in the policy rate in the January 22, 2021 MPS. Around 19 percent of the participants are expecting an increase in the policy rate, 10 percent are expecting an increase of 100 to 150 basis points.