Rupee at eight-month high against dollar

Rupee gains sharply to end at eight-month high amid soft demand for dollar from importers and healthy inflows.

KARACHI: The rupee gained sharply on Tuesday to end at an eight-month high amid soft demand for the dollar from importers and healthy inflows.

The rupee ended at 85.24/29 to the dollar, firmer than previous day’s close of 85.49/54. Dealers said the rupee was expected to hold steady in coming days.

“There were very few import payments today (Tuesday) and most of the oil companies are quiet as well,” said a dealer at a foreign bank. “Going forward, we do not expect any immediate payment pressure,” said the dealer. “In fact, healthy dollar inflows are likely to keep the rupee stable around current levels,” he added.

State Bank of Pakistan chief spokesman Syed Wasimuddin said this was the rupee’s strongest closing since June 10, 2010. A record inflow of remittances, strong foreign exchange reserves position, healthy exports and a current account surplus were the reason for the gain in the rupee’s value, he said.

In the money market, overnight rates ended little changed at between 11.50 and 12 per cent and dealers said the market was eyeing the fortnightly treasury bills auction on Wednesday, for which the central bank has set a target of Rs150 billion.

Published in The Express Tribune, February 9^th, 2011.