Big news for the Pakistani economy, the US dollar became cheaper than the rupee
The rupee extended gains for the second straight session in both the currency markets on Friday, as soft dollar demand and easing concerns over US-Iran war hysteria helped the currency rise, reported The News.
In the inter-bank market, the rupee closed at 154.83 to the dollar, compared with the previous closing of 154.88.
The rupee also managed to gain 50 paisas against the dollar in the open market. The local unit ended at 155.20 versus the greenback. It had settled at 155.70 in the previous session. Dealers said the rupee was likely to remain flat in the coming sessions.
“The currency is strengthening due to few import payments, which increased supply of the greenback,” a dealer said.
“Healthy foreign exchange reserves, improvement in the current account balance and strong foreign inflows are expected to keep the rupee stable at the current levels.”
In a statement made on Friday, the State Bank of Pakistan (SBP) had reiterated that currently, market forces were controlling the exchange rate and an impression that the government was manipulating it was not true.“Under the International Monetary Fund (IMF)-supported programme, there is no agreed target level for the exchange rate. ER [exchange rate] is market-determined,” the SBP said in a tweet on Friday.
IMF’s new assumptions, published in its staff-level report, assumed that the average exchange rate at the end of this fiscal year could be Rs160.64 to a dollar.
Some analysts said the new valuation of Rs160.64 was better than market expectations and underlined an orderly transformation to the market-determined flexible exchange rate regime.