Rupee hits 8-1/2-month high against dollar

High remittances, forex reserves and exports lend support.

KARACHI: The rupee gained sharply on Friday to end at an eight-and-a-half-month high. The rupee closed at 84.78/83 to the dollar, up from 85.10/12 on Thursday, the highest close since May 25, 2010.

Officials and dealers said a record inflow of remittances, strong foreign exchange reserves, healthy exports and a current account surplus were the reasons behind the rupee’s gain in value in recent days.

Remittances by overseas Pakistanis were recorded at $6.12 billion during the first seven months of fiscal year 2010-11, up 17.7 per cent from the year-ago period, according to data from the State Bank of Pakistan.

“Dollar inflows are pretty healthy at the moment, as remittances are rising and export proceeds are also good,” said a dealer at a local bank. “I think that the rupee is likely to remain steady in the days ahead - in fact, it can gain a bit further,” he said.

In the money market, overnight rates remained high and closed unchanged at 13.90 per cent in a tight market.

Published in The Express Tribune, February 12^th, 2011.