Rupee edges up

KARACHI: The rupee strengthened slightly against the U.S. dollar in the interbank market on Thursday, supported by increased dollar supply and improved economic outlook, dealers said.

The rupee closed at 284.12 to the dollar, compared with its previous close of 284.14, according to the State Bank of Pakistan. However, the rupee remained unchanged in the open market, where it traded at 285 per dollar.

"There is no pressure on the currency because exports and remittance inflows allow the rupee to appreciate at a slower pace," said a foreign exchange dealer. He said the rupee was expected to remain stable until the end of December, as the demand for dollars was subdued.

A report by brokerage Arif Habib Limited said the economic challenges faced by the country would gradually ease, as the gross domestic product (GDP) was projected to grow by 3.3 percent in the current fiscal year and the current account deficit was expected to be contained.

The report also forecasted that inflation would decline, with estimates for the fiscal year 2023/24 and 2024/25 being 24 percent and 12.8 percent, respectively. It anticipated that the central bank would start a cycle of monetary easing in January 2024, and that the better external flows and administrative measures would help to stabilise the rupee.