The rupee is predicted to stay steady until June, but traders are bracing for a possible depreciation of the currency due to the State Bank of Pakistan’s (SBP) anticipated reduction in interest rates before to the conclusion of the current fiscal year, The News stated on Sunday.
To predict the direction of the local currency in the following days, traders are keeping a watch on the central bank’s monetary policy decision.
Weak import payments, remittance inflows, and exports put downward pressure on the local unit during the outgoing week’s interbank market.
The rupee began the week at 278.33 versus the US dollar, but it gained strength and ended the week at 278.38.
Analysts believe that a decrease in interest rates might cause the local currency to fall, but until June, stability is anticipated.
Pakistan has repaid $1 billion in Eurobonds, although its foreign exchange reserves have not changed, according to financial terminal Tresmark.
This resulted from the significant current account surplus, notwithstanding the short-term need for considerable dollar borrowing.
According to Tresmark, the cash situation is not too dire.
We hope exporters would sell dollars in the future, which should ease this equation, even though some imports are piling up again. In order to increase our reserves, we are and will keep purchasing dollars from the interbank market, the statement continued.
The real effective exchange rate (REER) increased significantly to 104, it was said. Nothing will go wrong as long as the liquidity position remains robust, despite the fact that it is high.
