Currency review: Rupee stable against dollar

Observer Report

Karachi—The rupee has been showing a stable trend against the dollar over the past few months after some hefty rises and falls in early 2016. The local currency market resumed trading operation last week after a prolonged weekend on account of Eid-ul-Fitr celebrations from July 5 to July 9. With foreign exchange reserves at record levels, there were sufficient dollar supplies available in the market as workers’ remittances sent by overseas Pakistanis ahead of Eid-ul-Fitr continued to surge and posted almost 5pc growth during the first half of 2016.
Besides, higher inflows under home remittances ahead of Eid-ul-Fitr, strict SBP monitoring to stabilise domestic currency also provided support to the rupee. On the interbank market last week, there was a lack of interest in trading activities during the first session operation as market participants were still in a festive mood. The rupee/dollar parity showed a steadier trend amid dull trading in the week’s opening session.

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