Rupee edges higher against dollar

KARACHI: The rupee ended slightly higher against the dollar in the interbank market on Thursday.

The rupee finished at 278.37 to the dollar, up from 278.47 in the previous session.Dealers said the local unit gained ground as inflows from dollar selling from exporters and remittances were sufficient to meet the importer demand.

The financial markets were closed on Wednesday, December 25 due to Quaid-e-Azam Day and Christmas. In the open market, the rupee also rose, closing at 279.4 to the dollar, up from 279.51 in the previous session.

Analysts said that the rupee has remained stable because of a manageable external account position, increased remittances and growing exports in the face of strict fiscal and monetary policies. Inflation has decreased as a result of currency stability.

Given the growth of foreign exchange reserves, improved external accounts, strict monetary policy and a cautious fiscal approach with an emphasis on reforms to address structural issues, analysts predict that the rupee will devalue at an inflation difference of 4.0 per cent.The initiatives to stop smuggling and an emphasis on preferential trade agreements are also expected to support the rupee.