Expected cut in interest rate to push dollar value

KARACHI: Currency experts on Saturday feared the US dollar may resume appreciation against the rupee from the next fiscal year. The dollar has been restricted to around Rs278-280 for more than four months and is likely to rise once the interest rate is reduced. “We see the local currency at Rs295 to a dollar by December-end and interest rate at 15 per cent with a key assumption of political stability,” said Faisal Mamsa, CEO of Tresmark. “In our view, the rupee will remain locked around Rs280 per dollar till June end, but after that, it will undergo a gradual and more controlled depreciation of around Rs2 per month (equating to annual depreciation of about 10pc as Pakistan looks to cut interest rate and spur GDP growth and economic activity), he said. In the foreign exchange market short-term swaps have been volatile, yet overall activity is subdued. Exporters’ forward bookings have dwindled as they expect the rupee to depreciate quickly post-budget and as part of the IMF’s anticipated prior actions.