Rupee gains against dollar

KARACHI: The rupee marginally rose against the US dollar in the interbank market on Tuesday.The rupee closed at 278.61 per dollar, slightly up from its previous close of 78.7.

Dealers said the local unit recouped the previous session’s losses owing to soft dollar demand from importers. In addition, the increase in workers’ remittances boosted investor sentiment. Remittances from Pakistani citizens employed abroad surged to $2.9 billion in August, marking an impressive 41 per cent year-on-year increase.

“This boost in remittances is expected to provide relief for the current account, helping maintain a stable position and allowing essential imports to keep the local economy moving,” said Chase Securities in a note.The rupee was trading at 280.95 versus the greenback in the open market, up from 281.03 on Monday. Analysts predict that the rupee will trade within its current ranges as investors wait for the monetary policy announcement and updates on the approval of a $7 billion loan programme for Pakistan by the executive board of the International Monetary Fund.

The State Bank of Pakistan will announce its interest rate decision on Thursday. The financial sector expects a more modest rate cut, perhaps from 100 to 200 basis points, while the business community is asking for significant rate cuts. However, it is uncertain whether the SBP will take a cautious approach in the absence of an active IMF programme.