KARACHI: The rupee edged higher against the dollar in the interbank market on Monday. The rupee closed at 278.47 per dollar, up 0.01 per cent from its previous close.In the open market, the rupee also gained ground, trading at 279.52 against the dollar. That compared with 279.61 in the previous session.
Dealers said the local currency maintained a stable trend due to improved dollar liquidity amid growing forex reserves and Eid-related remittance inflows. Pakistan’s FX reserves held by the State Bank of Pakistan increased by $66 million to $17.147billion as of May 22. The country’s total liquid foreign reserves rose by $58million to $22.646 billion. However, the reserves of commercial banks fell by$8 million to $5.499 billion.
Analysts expect the local unit to remain range-bound ahead of the federal budget for the next fiscal year to be announced this week. Moreover, market players keep a close eye on developments related to the Middle East conflict.
“Market participants are increasingly pricing in the eventual reopening of the Strait of Hormuz and a normalisation in global oil supply chains, which has already started to weigh on crude oil prices,” said Chase Securities in a note. “For Pakistan, a net energy importer, lower oil prices would directly support the current account, inflation outlook, fiscal position, and exchange rate stability,” it added.
“Investor focus is now shifting toward a crucial sequence of domestic events in June, beginning with the FY27Federal Budget on June 5, followed by the SBP Monetary Policy Committee meeting on June 15 and the fiscal year-end on June 30,” it said.
