Rupee strengthens as dollar's slide continues

May 31 2019

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The dollar shed its value by Re1 in the open market to be traded at Rs148.50.  —  Reuters/File
The dollar shed its value by Re1 in the open market to be traded at Rs148.50. — Reuters/File

The rupee strengthened in the currency market on Friday as the value of the US dollar continued to slide in the interbank as well as the open market.

The greenback shed its value by Re0.35 in the interbank and was traded against Rs148.15. Similarly, the dollar shed its value by Re1 in the open market to be traded at Rs148.50.

According to currency dealers, the increasing inflows of remittance in connection with Eidul Fitr have supported the local rupee in the market. According to them, the majority of inflows came from Saudi Arabia and other Gulf countries, including the United Arab Emirates (UAE).

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The increased remittances played a vital role in strengthening the value of the rupee and supply of dollar in the market.

Forex Association of Pakistan President Malik Bostan said that trading in the interbank generally affects trading in the open market. He also expressed his optimism that the greenback will further shed its value in the open market, if its value continues to slide in the interbank.

Bostan said he hopes that the State Bank of Pakistan (SBP) will continue to follow up on the strict measures it had introduced in the money market against the unnecessary purchase of dollars to discourage those illegal practices by banks and importers.

On Thursday, the value of the US dollar decreased by Rs1.70 in the interbank market. The greenback settled down at Rs 148.70 in the interbank market. The decline had also dictated the open market, forcing the dollar to shed its value by Re0.50 to Rs149.50.

On Wednesday, the value of the dollar established in the interbank market at Rs150.22 — down Rs0.78. It, however, remained stable at Rs150 in the open market.

On Tuesday, the US dollar had reached the Rs151 mark in the interbank market, with the rupee falling by Rs1.40, while in the open market, the rupee had slid to Rs150 against the dollar, down Rs0.50 as compared to the previous day.

On Monday, falling demand coupled with a surge in supply had pushed dollar's price in the open market to Rs149.50 — down half a rupee from the Rs150 rate in the preceding session. In the interbank market, the greenback had been traded at Rs149.60 as compared to Rs150.90 in the earlier session, posting a decline of Rs1.30.