Rupee ends stable

KARACHI: The rupee ended largely stable against the dollar in the interbank market on Tuesday as the dollar supplies were enough to match importers’ demand, dealers said.

In the interbank market, Pakistani currency closed at 178.19 per dollar, compared Monday’s close at 178.17. In the open market, the rupee gained 70 paisas to end at 180.50 versus the greenback.

Dealers said the local unit traded in narrow ranges as the dollar supplies almost matched the importer demand.

“The rupee traded in the 178.15-178.25 range during the session,” said a foreign exchange dealer.

“We anticipate the rupee to stay stable, closing this year at 178 against the dollar,” he added.

Recent measures taken by the State Bank of Pakistan i.e. tightening of the regulations related to foreign currency buying and the frequent liquidity injections in the banking system have helped stabilise the rupee.

However, the fulfillment of the conditions imposed by the (IMF) International Monetary Fund as prior action before the sixth review of the $6 billion worth extended fund facility due on January 12 would be watched for cues.

Traders are also likely to monitor how the government brings down the trade deficit in coming months.

Analysts expect the trade gap to widen further in months to come, but the government is optimistic about trade balance prospects amid healthy remittances.

“The expected developments in export and import activities imply that the trade balance may gradually improve in coming months and settle down at significantly lower levels in the second half of the current fiscal year,” said the Monthly Economic Update & Outlook December 2021 published by the finance division.