Rupee strengthens

The rupee strengthened against the dollar in the interbank market on Wednesday, amid dollar selling by large banks, dealers said.

The rupee closed at 141.12/dollar, compared with the previous closing of 141.28.

“There was sluggish dollar demand from importers,” a dealer said. “Dollar selling by big bank improved the supply of the greenback in the market.”

Dealers expect the rupee will extend gains as no import and foreign debt payments are due in the next couple of weeks.

However, the rupee lost its value against the dollar in the open market. The rupee traded at 141.60 versus the dollar, compared with 141.50 in the previous session.

Pakistan is likely to enter the International Monetary Fund programme by June, according to a brokerage report.

“Once again IMF will demand Pak rupee to be free-floated and we expect the PKR to

settle in the range of Rs160-165 by December 2019 given expectations of REER (real

effective exchange rate) below 100,” the report published by the Topline Securities

said.

The report forecasts the central bank’s policy rate to increase to 12 percent during 2019.

The budget deficit is expected to exceed 7 percent in the current fiscal year after a gap of five years, it added.