Wednesday saw a slight dip in the rupee, settling at 278.40 against the US dollar as per the SBP.
An IMF official highlighted that despite Pakistan’s efforts to control inflation through monetary policy tightening in recent years, there’s still more to be done on both demand and supply fronts.
Internationally, the US dollar softened as traders analyzed the Federal Reserve’s stance on interest rates, which is expected to remain restrictive for the foreseeable future according to comments from Fed officials.
Recent weeks witnessed a rise in the US dollar due to robust economic data and persistent inflation, dispelling hopes of imminent rate cuts.
Tensions in the Middle East further boosted the dollar’s status as a safe-haven asset, impacting currency markets globally. This strength kept the yen near multi-decade lows, prompting concerns from Japanese authorities about potential market interventions.
The dollar index, gauging the US currency against six counterparts, stood at 105.97, slightly off the recent high but still up 4.5% for the year.
Oil prices, crucial for currency dynamics, remained relatively stable following a previous session’s 3% decline. Market sentiment remained cautious amid concerns over this year’s demand and indications of potential conflict resolution in key oil-producing regions.
Brent futures edged up 13 cents to $87.42 a barrel, while US West Texas Intermediate (WTI) crude futures rose 6 cents to $82.75 a barrel.
The previous session’s decline was fueled by lower-than-expected fuel demand projections for this year and increased US oil inventories.
In the inter-bank market, the dollar was bid at Rs 278.44 and offered at Rs 278.64.
In the open market, the rupee depreciated by 13.00 paisa for buying and 9.00 paisa for selling against the USD, closing at 277.20 and 279.66, respectively. Against the Euro, the PKR saw a decline of 1.14 rupees for buying and 1.10 rupees for selling, ending at 293.56 and 296.25. However, against the UAE Dirham, it gained 3.00 paisa for buying and 4.00 paisa for selling, settling at 75.10 and 75.80, respectively. Against the Saudi Riyal, the rupee lost 5.00 paisa for buying and 4.00 paisa for selling, closing at 73.23 and 73.91, respectively.
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