Rupee ends higher against dollar

KARACHI: The rupee closed marginally stronger against the dollar in the interbank market on Tuesday.

The rupee closed at 278.34 per dollar, compared with Monday’s close of 278.44.Dealers said the rupee strengthened for a third session in a row, with dollar inflows meeting the demands of importers and businesses.

In the open market, the rupee gained ground for a second consecutive session against the dollar. It was trading at 280.2 versus the greenback, compared with 280.3 in the previous session.

The improvement in the external current account also boosted investor sentiment.Pakistan’s current account deficit (CAD) reduced by 78 per cent year-on-year to $162 million in the first month of the current fiscal year due to an increase in remittances and an improvement in the balance of primary income.

“CAD is expected to increase this year due to economic recovery, albeit slow, amid expectations of declining interest rates and largely stable FX,” said Optimus Capital Management in a note.

“However, with softer international commodity prices and depleted purchasing power, we expect CAD to remain below 1.0 percent of the GDP, in line with the SBP’s target of zero to 1.0 per cent of the GDP and the IMF’s April 2024 projections of 1.2 percent of the GDP,” it added.