Rupee strengthens as dollar continues to shed value

Falling demand coupled with a surge in supply pushed dollar’s price on Monday to 158.75/158.95 in early trade session in the interbank market.

According to the analysts, rupee is strengthening after disbursement of IMF’s Emergency Funding of USD 1.4 billion to Pakistan under Rapid Financing Instrument (RFI).

Profit spoke to FX dealers at the treasuries of various banks to get a view of where the market was headed in the mid-term. The Coronavirus had not done so much damage to the markets at the time and there was definitely less uncertainty. Things have changed since but for the sake of perspective, this was what the general consensus was:

The rupee will appreciate further as FX reserves get more support in the coming months and there is more improvement in terms of the external account. It could go as low as 145.00, not lower than that, and also no higher than 155.00 in the medium term. A range-bound USD-PKR parity would be maintained by the SBP.