Rupee recovers on improved dollar inflows

KARACHI: The rupee recovered on Thursday to close higher due to improved dollar inflows and easing demand from importers.

The rupee ended at 165.81 to the dollar in the interbank market, 0.28 percent or 47 paisas stronger than the previous close of 166.28.

In the open market, the rupee gained 40 paisas to close at 166.40 per dollar. It finished at 166.80 on Wednesday.

Dealers said improvement in supplies and some respite in demand from importers helped the local unit recoup its losses.

“We saw inflows that were because of some dollar selling by exporters. The outflows were also comparatively lower from the previous session,” said a currency dealer.

Dealers did not suspect that central bank intervention helped prop up the rupee.

“Today’s recovery only looks like a temporary relief for the domestic currency as we expect the import payments will continue,” the dealer added.

“Near-term outlook for the rupee remains bearish. The rupee could touch 167 to 168 levels any time due to higher food and industrial imports.”

The sentiment for the rupee stayed weak given the current account deficit concerns.

A market is worried about the rising trade imbalance amid higher imports, which could push the current account deficit wider in the coming months.