Rupee extends gains

KARACHI: The rupee managed to post further gains against the dollar on Tuesday on lower import payments and an improving economic outlook, traders said.

In the interbank market, the rupee closed at 159.35 against the dollar, up 0.13 percent from its closing of 159.56 on Monday.

Traders said the rupee continued to appreciate versus the greenback on the back of a slowdown in the dollar demand from importers.

“There is a lack of import payment pressure. It seems the government had already bought oil to meet its demand,” a foreign exchange trader said. “The market didn’t react to the surge in the international oil prices,” he added. Oil prices hit a 13-month high of over $60/barrel on Tuesday helped by rising optimism about a pickup in the fuel demand. The rupee has been gaining from inflows from remittances, exports and the international financial institutions and fundamentals continue to remain strong.

“The factors that have driven the rally so far are not anticipated to change in the coming days. Underlying factors are seen as positive for the rupee with inflation remaining in control, exports and remittances and inflows from Roshan Digital Account continued to support the local currency,” another dealer said. “The will be no outflows as Saudi Arabia and the United Arab Emirates haven’t withdrawn $2 billion loans from Pakistan. This could keep the foreign exchange reserves and the balance of payments’ position stable.”

The currency is being able to maintain gains, as importers’ buying looks at lower levels in the coming days. The rupee is expected to easily trade at 159 levels in the sessions ahead, traders said.