Fresh inflows help firm up rupee

KARACHI: Fresh investments into the country and remittances ahead of Eid holidays helped the rupee gain against the US dollar in inter-bank trade on Wednesday.

The local currency climbed 15 paisa against the greenback to end the day at an exchange rate of 85.82.

“Financial markets in the US had been closed for Labour Day, causing a shortage of dollars in the local market,” commented President All Pakistan Foreign Exchange Dealers Association Malik Bostan.

“Now that markets have re-opened there, receivables that were pending since the weekend have been cleared, helping strengthen the local currency,” he added.

Cash inflows traditionally increase ahead of Eidul-Fitr as overseas Pakistanis send extra money home for celebrations. But dealers warned that pressure on the currency would continue in the short term because of import payments.

The rupee has lost 44 per cent of its value against the greenback in the past 30 months.

In the money market, overnight rates ended between 12 and 12.15 percent compared with Tuesday’s close of 12.75 per cent.

Published in The Express Tribune, September 9^th, 2010.