Rupee strengthens

KARACHI: The rupee closed stronger against the dollar on Monday added by healthy inflows, while positive sentiment amid increase in exports helped prop up the local unit, dealers said.

In the interbank market, the rupee ended 0.27 percent higher at 159.56 versus the greenback, compared with 159.99 on Thursday. In the open market, the rupee closed at 159.80/dollar, compared with the previous closing of 160.10.

“Inflows from remittances, exports and debt securities outpaced importers’ demand today,” a foreign exchange dealer said. “The rise in exports in January and reports of retaining $2 billion financial support from Saudi Arabia and the United Arab Emirates to Pakistan also helped the sentiment,” he added.

Pakistan’s exports rose 8 percent to $2.132 billion in January 2021 from $1.972 billion a year ago. Saudi Arabia retained the remaining $1 billion deposit, while the UAE has also rolled over a $1 billion deposit for another year, according to reports.

Dealers expect the rupee to continue to be supported in the coming sessions potentially trading in the range of 159.30 and 159.60. However, some traders warned against expecting strong gains in the rupee in the near-term, given the higher trade deficit and uncertainty over the Financial Action Task Force (FATF) decision about Pakistan’s status.