Karachi: The Pakistani rupee is expected to maintain stability against the US dollar in the coming week, supported by balanced supply and demand conditions in the foreign exchange market, according to currency traders.
The local currency showed limited movement during the past week. After closing at 279.85 per dollar in the interbank market on Monday, the rupee edged up slightly to end the week at 279.77 on Friday, indicating a largely range-bound trend.
Market participants believe steady inflows will continue to offset import-related demand. Currency dealers expect the rupee to trade within a narrow band as inflows from exports and remittances help balance dollar demand.
In its weekly market update, Tresmark highlighted a noticeable increase in forward bookings by exporters despite relatively weak premiums. The report noted that exporters are opting for longer-tenor bookings than usual, suggesting expectations of exchange rate stability rather than sharp volatility.
The report further indicated that current hedging activity is being driven more by routine cost management needs than by concerns over abrupt currency movements.
Meanwhile, Pakistan’s foreign exchange reserves continue to show gradual improvement. State Bank of Pakistan reserves rose by $13 million to $16.1 billion during the week ending January 23, while total liquid foreign reserves increased by $35 million to $21.293 billion. Commercial banks’ reserves also grew by $22 million to $5.192 billion.
The central bank attributed the rupee’s stability to a manageable current account deficit and strong remittance inflows. Pakistan received $3.6 billion in remittances in December, reflecting a 17 per cent year-on-year increase, while inflows during the first half of the fiscal year rose 11 per cent to $19.7 billion.