KARACHI: The rupee held steady against the dollar in the interbank market on Monday despite unmatched demand and supply of the US currency.
According to data released by the State Bank of Pakistan (SBP), the rupee ended at 178.04 to the dollar, unchanged from the previous close.
Earlier, analysts had predicted that the rupee would likely extend losses in the days ahead as demand from importers for payments and slow inflows from exporters take a toll.
A sharp rise in imports, fuelled by global commodity prices and stronger domestic demand, widened the trade deficit and resulted in the weakening of the local currency.
A foreign exchange dealer said: “We anticipate the rupee to remain on the back foot next week, as a decline in the foreign exchange reserves due to rising imports and foreign debt-related outflows remains a drag on sentiment,” said a foreign exchange trader.
It seems that until the end of the month, the demand for hard currency from importers would continue, especially from the energy sector, which would impact the rupee.
“Inflows from exporters remain sluggish as they expect the rupee to depreciate more in the days ahead,” he added.
On Sunday, the central bank amended the regulations governing the sale of foreign exchange to individuals by exchange companies in order to enhance documentation and transparency and to further strengthen the foreign exchange regulatory regime.
“This step, which is in continuation of other measures being taken by SBP, is primarily to discourage speculative buying and selling of foreign exchange from the exchange companies without affecting the ability of the market to serve the genuine needs of the public,” the SBP said.
According to new amendments, exchange companies shall ensure that any individual shall not purchase foreign exchange from all exchange companies in excess of $10,000 per day and $100,000 (or equivalent in other currencies) per calendar year, in the form of cash or outward remittances.