Rupee likely to stay range-bound against US dollar this week: report

KARACHI: Driven by matching demand and supply of the hard currency, the traders said that the rupee is seen range-bound against the dollar during this week The News reported on Monday.

A dealer at a leading commercial bank said that it is expected that the rupee will continue to trade around the current levels, with little fluctuations, unless the markets witness a big demand among importers and corporates.

“The local unit should be range-bound, trading in the band of 159.80 to 160.30 per dollar in [the] sessions ahead,” he added.

Read more: US dollar rate against rupee on December 7

With the rupee weakening 71 paisas to close the week at 160.13 against the greenback during the outgoing week, some traders expect the local unit to come under pressure due to year-end importers’ demand and higher debt repayments.

Reportedly, importers have started buying dollars, amid fear that the local currency could depreciate in the coming months. Foreign debt repayments are also expected to put pressure on the currency and contribute to the strain on foreign exchange reserves, they said.

Pakistan’s foreign exchange reserves fell $311 million, or 1.5%, to $20.241 billion as of November 27. The forex reserves held by the State Bank of Pakistan (SBP) dropped $305 million to $13.110 billion due to external debt repayments.

'Rupee may face downside pressure in near future'

However, it is feared that owing to the spread of the coronavirus, the rupee may face downside pressure if the macroeconomic fundamentals deteriorate.

“The rupee seems to be seesawed unless the macroeconomic fundamentals offer clarity on the direction of the exchange rate,” another dealer told The News, adding that the trading range for the rupee for this month should be 159-161.

The constant increase in remittances, healthy exports, higher foreign exchange reserves, and the current account surplus can help trigger the rupee’s strength against the dollar in the near-term, according to dealers.

Read more: Pakistani rupee inches further up against US dollar in interbank, open markets

“The rupee snapped recent losses to stabilise at 160 level and we anticipate the rupee to hover at this psychological level at least in the next session,” a foreign exchange dealer said.

“However, we expect it to come under pressure again due to year-end importers’ demand and higher debt repayments,” he added.

The latest data issued by the Pakistan Bureau of Statistics revealed that exports increased 7.67% to $2.161 billion in November from $2.007 billion in the same month of the last fiscal year.