Rupee gains

KARACHI: The rupee gained marginally against the dollar in the interbank market on Wednesday, dealers said.

The rupee closed at 160.54 against the dollar, compared with the previous closing of 160.64.

In the open market, the rupee ended at 160.70 versus the greenback, up from 160.90 in the previous session. Dealers said the local unit traded weaker to as low as 160.65 against the dollar in the opening deals, but an improvement in the supply of the dollars helped it post slight gains at the close of the trade. “We anticipate the local unit to remain range-bound, trading in the 160.45 and 160.75 range in the coming sessions,” the currency dealer said. Another dealer said the rupee would strengthen further if the dollar supplies are more than the demand in the market. However, increasing demand for import payments may put pressure on the rupee.

A monthly economic update and outlook published by the government said that the sudden surge in imports due to the increase in the international oil prices and import of additional food products enhanced imports by $1.2 billion to $5 billion alone in December 2020, compared with $3.8 billion in December 2019.

“However, there was no pressure on the foreign [exchange] reserves as the current account remained in surplus for H1FY2021. Looking forward, depending on these explanatory factors, imports may remain $4.5 – $ 5.0 billion next month. Exports are expected to stabilise around the current levels,” it said.