Rupee rises for second straight session

KARACHI: The rupee extended gains for the second consecutive session against the dollar in the interbank market on Friday. The rupee ended the day at 277.61 per dollar, up from 277.79 on Wednesday.

The rupee gained some ground because exporters’ dollar sales and remittances surpassed importers’ demand, according to currency dealers.However, the rupee erased gains it made in the previous session in the open market. The local currency was trading at 279.13 versus the dollar, down from 279.11 during the last trading session.

The State Bank of Pakistan’s governor’s annual report for the fiscal year 2024 released on Friday stated that apart from other factors, the exchange rate stability also helped the deceleration of inflation in H2-FY24.

The rupee’s stability came on the back of a number of factors, including the narrowing current account deficit to a 13-year low of 0.2 per cent of GDP on account of growth in exports and remittances amid muted increase in imports, the report said.

Trends in the foreign exchange market were also facilitated by inflows under the $3 billionstand-by agreement (SBA) with the International Monetary Fund (IMF) in June 2023, and ensuing official inflows from multilateral and bilateral external creditors. In addition, the government’s decision to approach the IMF for the Extended Fund Facility (EFF) programme; FX market reforms including in exchange companies; and mobilization of deposits from friendly countries supported the build-up in FX reserves and stability in the exchange rate, said the report.