Reports that the IMF might restart its loan program caused the rupee to rise by 70 paise in the interbank market on Monday because of this, and this caused it to rise even faster.
The IMF-Pakistan talks were seen as positive in the United States, so the currency market was able to make a small change in how the exchange rate was going. However, there was no clear outcome from the meeting. The market used the hopes of the meeting to play with the speculation, and the market could see the dollar rise in the coming sessions.
There is a belief that the rupee didn’t rise because it was given any help. Instead, currency dealers say that the meeting with the IMF was used to make the dollar less valuable. At the end of the day, the dollar was worth Rs186.05, down 70 paise from the previous day. The dollar was worth Rs186.75 on Saturday.
During the last few months, the rupee-dollar exchange rate has gone through a lot of big changes in price, and the local currency has lost its value.
March’s current account deficit (CAD) grew by $1 billion, making it $13 billion in the first three quarters of this fiscal year.
People who work with currencies think that when the Canadian dollar went up, it would have caused the local currency to fall. But in the next session, it made a 70-pence recovery against the dollar, which surprised everyone.
Investors from outside the country withdrew money in March. So far this month, there have been no inflows of foreign money into domestic bonds, which is bad news for the foreign investors.
