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KARACHI, July 23: Short-term money rates rose on Wednesday and dealers said rates are likely to remain stable for the rest of the week.
Overnight call rates ended at 11.50 per cent, up from Tuesday’s close of 10.50 per cent.
“There is an inflow of Rs8.7 billion tomorrow so there are expectations of a repo,” said a brokerage house dealer.
Dealers said the central bank may conduct a repo as inflows of about Rs8.7 billion were scheduled for Thursday from maturing government securities.
In the currency market, dealers said the rupee ended at 70.82/87 to the dollar, virtually unchanged from Tuesday’s close.
Dealers expect the rupee to remain stable in the short term but are uncertain about the medium to long term.
Dollar firmer
LONDON: The dollar was firmer late Wednesday against the euro and yen on speculation the next move in US interest rates could be up, as the central bank tries to keep rising inflation in check.
Dealers said the euro also came under pressure after weaker-than-expected eurozone industrial orders data added to concerns the European economy is slowing sharply.
Eurozone industrial orders slumped 3.5 per cent in May from April, compared with forecasts for a drop of 2.0 per cent.
“May’s sharp decline adds to a recent stream of worrying news on the manufacturing sector and, indeed, the eurozone economy overall,” said economist Howard Archer at consultants Global Insight.
“Full order books have kept production humming so far,” Bank of America economist Holger Schmieding said of the figures.
“But as old orders are worked off and new orders are no longer increasing, industrial output looks set to stagnate soon as well.”
In late European trade, the euro was at $1.5705, down from $1.5733 earlier and $1.5781 late on Tuesday in New York.
Against the Japanese currency, the dollar rose to 107.71 yen from 107.25.
Dealers cited comments from a senior US Federal Reserve official warning of the need to hike interest rates to tackle inflation as also helping the dollar.
US interest rates at 2.0 per cent compared with 4.25 percent in the eurozone have played in favour of the euro as investors generally favour higher yielding currencies.—Agencies
