Connect with us

Hi, what are you looking for?

Online Business Success

Rupee to stay steady against US dollar next week: analysts

371361 115747 updates


The Pakistani rupee is expected to stay steady in the coming week.
The Pakistani rupee is expected to stay steady in the coming week.
  • “We see rupee stable in the days ahead, despite rising economic uncertainty,” says analyst.
  • Markets seeing sharp exodus of foreign currency from equity markets ($80 million in the first 17 days of September).
  • Central bank’s dollar selling interventions helped arrest rupee’s plunge.

KARACHI: Pakistani rupee is expected to stay steady against the greenback during the next week, said analysts as per a report published in The News.

Analysts said the local unit is expected to trade within the existing range next week amid matching the dollar demand and supply, while the central bank’s monetary stance will also factor in.

The local currency saw highly volatile moves this week, and hit an all-time low of 169.12 on Wednesday. The central bank’s dollar selling interventions helped arrest the rupee’s plunge, allowing the local unit to recover.

The verbal intervention by the central bank also stopped speculative trades. The rupee closed at 168.19 to the dollar on Friday.

A foreign exchange trader at a commercial bank said, “We see the rupee stable in the days ahead, despite rising economic uncertainty. The match in the demand and supply of the greenback and decline in the real effective exchange rate (REER) could stabilise the rupee.”

Analysts said the 169 per dollar level was not unprecedented, adding that the speed at which it got there in spite of having record reserves left everyone flustered, escalating uncertainty and driving self-doubt.

A lack of intervention would have let that situation worsen with increased dollarisation, hoarding and scaling back business initiatives, they added.

The $1.5 billion current account deficit in August was amongst the highest recorded in months. Markets are also seeing a sharp exodus of foreign currency from equity markets ($80 million in the first 17 days of September.

Advertisement. Scroll to continue reading.

“The rupee seems comfortable viz-aviz REER clocking in 97.38 in August this shows rupee is undervalued by about 3-4 rupees,” said an analyst in a report issued from Tresmark.

“While the rupee is likely to stabilise around the 168.50 figure for a few weeks, the Afghanistan-Pakistan situation will take center stage going forward with regards to the rupee’s direction, as other indicators (reserves, CAD, remittances) could throw the local currency a couple of rupees here and there, but not be responsible for creating a fresh trend,” he said.

The currency market in Pakistan lacks the depth and volume of a mature market. When avenues of fresh money are few and players are less, the age old quote of ‘supply & demand’ becomes redundant, as there are no new buyers or sellers when prices get distorted.

As one senior trader said, “We need a strong anchor from the SBP.”

In the opinion of some market players, the central bank should also have intervened when the US dollar went below 155 (pre-Covid levels).

About the Afghanistan factor, the report said the burden Pakistan would have to shoulder due to this development was to the tune of $500-700 million per month.



Source link

Advertisement. Scroll to continue reading.
Click to comment

Leave a Reply

Latest

Top Stories

Coinbase is expanding its operations into various countries in Europe amid a “crypto winter.” Despite laying off numerous employees and rescinding job offers, Coinbase’s...

Top Stories

African degens are on a journey to the moon. With crypto, African people’s savings are hedged against insane inflation levels, they can find employment...

Top Stories

Coming every Saturday, Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption...

Top Stories

Crypto exchange Binance has signed a memorandum of understanding with the Securities and Exchange Regulator of Cambodia (SERC), according to a June 30 announcement. Binance...

Top Stories

When cryptocurrencies like Bitcoin (BTC) go through bear phases like the one we currently find ourselves in, the idea of earning passive income from...

Online Business Success

A representational image of the Federal Board of Revenue building. — APP/File The Federal Board of Revenue (FBR) announced that the last date for...

Advertisement

You May Also Like

Uncategorized

Introductions get a lot of attention. I’ve explored the topic of how to write them even though as a reader, I always skip them....

Online Business Success

The internet is now our nervous system. We are constantly streaming and buying and watching and liking, our brains locked into the global information...

SEO Guide

There are all kinds of pictures of the world on the internet, but to find one of these specific pictures that you want to...

Online Business Success

You can think of link building in many ways. I like to call it tedious, painful, and a test of patience. It’s also necessary...

Advertisement