A kind of firmness prevailed on the money market on Friday as the rupee held present levels against the dollar on Friday in the process of trading activity, dealers said. According to reports, the State Bank of Pakistan (SBP) on Friday raised its policy rate by 25 basis points to six percent to pre-empt overheating of the economy and inflation breaching its target rate.
How the currency market would react to the raise made by the SBP, it has to be observed, they said. The rupee was unchanged against the dollar for buying and selling at Rs 112.20 and Rs 112.50 respectively, while it lost Rs 1.10 in terms of the euro for buying and selling at Rs 139.50 and Rs 141.50 respectively, they added.
In the final Asian trade, The dollar traded above its recent lows against major rivals on Friday, having bounced after US President Donald Trump said he wanted a "strong dollar", contradicting earlier comments made by Treasury Secretary Steven Mnuchin.
Trump told CNBC in an interview in Davos, Switzerland, on Thursday that he ultimately wants the dollar to be strong, adding that Mnuchin's comments had been misinterpreted.
The dollar's bounce pulled the euro away from three-year highs and knocked sterling off its strongest levels since June 2016. The dollar index has slid more than 3 percent so far in January.
Some market participants doubted whether Trump's comments would be enough to change the recent trend of dollar weakness.
The market forces, fundamentals all suggest that the dollar should weaken over the course of 2018," said Roy Teo, investment strategist for LGT Bank in Singapore.
The dollar was trading against the Malaysian ringgit at.873 and the greenback was at 6.329 versus the Chinese yuan.
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Open Bid Rs 112.20
Open Offer Rs 112.50
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Bid Rate Rs 110.54
Offer Rate Rs 110.55
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According to currency dealers, the greenback resumed trading a healthy note following fresh buyers' interest in the market. Consequently, it was closed higher at Rs 112.25 and Rs 112.45 for buying and selling, respectively, as compared to the overnight closing trend of Rs 112.00 and Rs 112.40 respectively, they added.
Versus the pound sterling, the national currency also followed the same suit and remained under pressure for the fifth consecutive day. The pound's buying and selling rates further rose from Thursday's closing of Rs 159.00 and Rs 159.90 to Rs 159.15 and Rs 160.00 respectively, they said.
The dollar opened at Rs 112.25 (buying) and Rs 112.35 (selling) against last rate. It closed at Rs 112.25 (buying) and Rs 112.35 (selling).