Inter-bank: rupee sees 11th consecutive gain against US dollar

The Pakistani rupee continued to march upward against the US dollar for the 11th successive session as it appreciated 0.06% in the inter-bank market on Wednesday.

As per the State Bank of Pakistan (SBP), the rupee settled at 282.20 after an increase of Re0.17.

On Tuesday, the rupee had registered a marginal gain to settle at 282.37 against the US dollar.

In a related development, the cumulative borrowing by the federal and provincial governments for budgetary support from the domestic banking system rose by 200% during this fiscal year (FY24) so far.

Internationally, the US dollar remained under pressure on Wednesday, while the euro flirted with a four-month peak, as expectations that the Federal Reserve would soon cut interest rates took hold in the market, with thin year-end flows keeping movements limited.

With traders out for holidays globally until the New Year, the curtailed week is likely to see muted volumes.

The dollar index, which measures the US currency against six rivals, was at 101.54, just shy of the five-month low of 101.42 it touched last week. The index is on course for a 1.9% drop in 2023 after two straight years of strong gains on the back of the Fed hiking rates to battle inflation.

The recent weakness in the dollar has been a result of the markets anticipating rate cuts from the Fed next year denting the appeal of the greenback.

Markets are now pricing in a 79% chance of a rate cut starting in March 2024, according to CME FedWatch tool, with as much as 153 basis points of cuts priced in for next year.

Oil prices, a key indicator of currency parity, stabilised on Wednesday after the previous day’s strong gains as investors monitored Red Sea developments, with some major shippers resuming passage through the trade route despite continued attacks and broader Middle East tensions.

Brent crude futures was down 17 cents, or 0.21%, at $80.90 a barrel by 0940 GMT. US West Texas Intermediate crude eased by 34 cents, or 0.45%, to $75.23 a barrel.

Inter-bank market rates for dollar on Wednesday

BID                            Rs 282.20

OFFER                      Rs 282.40

Open-market movement

In the open market, the PKR gained 52 paisa for buying and 56 paisa for selling against USD, closing at 280.79 and 283.20, respectively.

Against Euro, the PKR gained 34.00 paisa for buying and 33.00 paisa for selling, closing at 307.85 and 310.67, respectively.

Against UAE Dirham, the PKR gained 21.00 paisa for buying and 25.00 paisa for selling, closing at 76.48 and 77.17, respectively.

Against Saudi Riyal, the PKR gained 24.00 paisa for buying and 15.00 paisa for selling, closing at 74.54 and 75.19, respectively.

Open-market rates for dollar on Wednesday

BID                            Rs 280.79

OFFER                      Rs 283.20