Currency: Rupee stronger against dollar

Rupee ended firmer at 90.68/73 to dollar, compared to its close of 90.70/78 on Friday because of increased remittances

KARACHI: The rupee ended firmer at 90.68/73 to the dollar, compared to its close of 90.70/78 on Friday because of increased remittances. Remittances increased 23.4% to $8.59 billion in the first eight months of the 2011/12 fiscal year, compared with $6.96 billion in the same period last year. In February, overseas Pakistanis sent back $1.16 billion. Dealers expect some pressure on the rupee because of rising global oil prices. The State Bank of Pakistan warned last month that financing the country’s projected current account deficit would be a challenge. The deficit is expected to widen further in the coming months because of debt repayments and a lack of external aid. The central bank kept the key policy rate flat at 12% for the next two months in its monetary policy announcement in February. In the money market, overnight rates were unchanged at their top level of 11.90% amid tight liquidity in the interbank market.

Published in The Express Tribune, March 13^th, 2012.