Rupee firm, overnight rates flat

Reuters April 30, 2010

KARACHI: Pakistani rupee firmed against the dollar on Friday amid soft demand from importers and dealers said they expected the rupee to hold steady in coming days.

The rupee closed at 83.95/84.00 to the dollar, up from Thursday’s close of 84.00/84.05. “There was not much demand from importers so no heavy dollar buying was seen, which supported the rupee,” said a dealer at a foreign bank. “The dollars available in the market were enough to meet demand,” he said. Dealers said they expected the rupee to remain stable in the short-term but it could weaken in the medium-term because of pressure from import payments. In the money market, overnight rates ended flat at 9.60 per cent in a liquid market.

“There is decent liquidity present in the market at the moment, so rates remained soft,” said a brokerage house dealer. Dealers said net outflows worth Rs8 billion are scheduled on Monday. Inflows worth Rs72 billion are scheduled for Thursday, but the impact is likely to be offset by outflows from a fortnightly treasury bill auction, for which the central bank has set a target of Rs75 billion.

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