Rupee gains for second consecutive session

KARACHI: The rupee ended higher for a second straight session on Friday as demand for dollars by importers was offset by the selling of the greenback by exporters, while an increase in foreign exchange reserves also supported the local unit, dealers said.

In the interbank market, the rupee settled at 278.57, up from 278.67 in the previous close.“Despite importers’ need, exporters’ dollar sales contributed to the rupee’s modest rise versus the dollar,” a currency dealer said.Pakistan’s central bank’s foreign reserves rose by $33 million to $9.44 billion as of August 30.The rupee lost ground against the dollar in the open market. it was trading at 280.94, compared with 280.25 on Thursday.

Dealers expect the rupee to trade in a range-bound manner until the International Monetary Fund’s executive board approves a new $7 billion loan programme for Pakistan.“The government is exploring all avenues to bridge the external financing gap. While negotiations with bilateral partners continue, the government is also actively engaging with international banks and investors to secure commercial loans,” said Chase Securities in a note.

“The finance minister faces a challenging task, mandated with the responsibility of closing the financing gap at favourable rates within a limited timeframe to ensure timely approval from the IMF board,” it said.“Any further delay in the programme could unsettle financial markets, though the government remains confident that financing will be secured soon.”