Foreign Currency

Rupee holds steady against dollar

A foreign currency counts Pakistani rupee notes at a shop in Karachi, on March 2, 2023. — Online

KARACHI: The rupee remained largely stable against the US dollar in the inter-bank market on Monday, with a marginal increase to close at 277.94, a gain of Re0.01.

In the open market, the rupee strengthened by 6.00 paisa for buying while holding steady for selling, ending the day at 277.81 and 280.20 respectively against the dollar.

The rupee gradually strengthened versus the dollar due to healthy inflows from remittances and export earnings. In addition, positive sentiment about Pakistan’s economy also supported the local unit.

The rupee is likely to maintain a steady range of 290 to 301 against the US dollar by December, as analysts predict stability anchored by the prospect of a new International Monetary Fund (IMF) bailout programme as early as June.

Assuming that a new IMF programme will be confirmed in the coming months, Topline Research polled important market players to find out their opinions on a few macroeconomic and market variables.

It is interesting to note that, in contrast to polls done three to six months ago, market participants’opinions on the policy rate and the prospect for the rupee/dollar parity have changed six months ahead of time. They are also now more bullish about the stock market.

“No major fall expected in PKR… in response to our question regarding the PKR/USD parity outlook in the interbank market by Dec 2024 after the new IMF programme, 49 percent of the participants anticipate the PKR/USD parity to range between Rs 290-310,” said Topline Securities.

“This contrasts with the previous survey conducted 3 months ago in Dec 2023, where 38 percent of participants expected the rupee/dollar parity to be between Rs 290-310 by June 2024.”

“Thus, many market players now see some stability in the local currency,” it added. Notably, in contrast to the 2 percent of respondents who predicted the same range by June in the survey conducted three months prior, 23 percent of participants now anticipate the rupee to trade between 250 and 270 against the dollar by December 2024.

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