Rupee again sees marginal decline against US dollar

The Pakistani rupee registered further losses, depreciating 0.04% against the US dollar in the inter-bank market on Wednesday.

At close, the local unit settled at 278.40, a loss of Re0.11 against the greenback, as per the State Bank of Pakistan (SBP).

On Tuesday, the rupee had registered a marginal decline to settle at 278.29 against the US dollar, according to the SBP.

In a key development, the International Monetary Fund (IMF) has projected Pakistan’s GDP growth rate at 2% for the current fiscal year compared to -0.2% in the fiscal year 2023. It also projected a decline in inflation, i.e., from 29.2% to 24.8%, and unemployment from 8.5% to 8%.

Internationally, the US dollar was broadly steady on Wednesday, keeping the yen rooted near 34-year lows after comments from Federal Reserve officials, including Chair Jerome Powell, suggested U.S. interest rates are likely to stay higher for longer.

Top US central bank officials including Powell backed away on Tuesday from providing any guidance on when interest rates may be cut, saying instead that monetary policy needs to be restrictive for longer, dashing investor hopes for significant easing this year.

The comments follow a slew of data in recent weeks that highlight the strength of US economy along with persistent inflation.

Against a basket of currencies, the dollar was last at 106.33, just below the five month peak of 106.51 touched on Tuesday.

Oil prices, a key indicator of currency parity, slipped for the third straight session on Wednesday as likely higher US commercial inventories weighed, while weaker economic data from China and dimmed prospects of interest rate cuts stoked worries about global demand.

Brent futures for June were down 21 cents, or 0.2%, to $89.81 a barrel at 0915 GMT, while US crude futures for May were down 19 cents, or 0.2%, to $85.17 a barrel.

Oil prices have softened so far this week as economic headwinds curb gains from geopolitical tensions, with markets eyeing how Israel might respond to Iran’s weekend attack.

Analysts do not expect Iran’s unprecedented missile and drone strike on Israel to prompt dramatic sanctions on Iran’s oil exports from the United States.

Inter-bank market rates for dollar on Wednesday

BID                            Rs 278.40

OFFER                      Rs 278.60

Open-market movement

In the open market, the PKR gained 9 paisa for buying and 11 paisa for selling against USD, closing at 277.07 and 279.57, respectively.

Against Euro, the PKR gained 65 paisa for buying and 72 paisa for selling, closing at 292.42 and 295.15, respectively.

Against UAE Dirham, the PKR gained 19 paisa for buying and 20 paisa for selling, closing at 75.13 and 75.84, respectively.

Against Saudi Riyal, the PKR gained 12 paisa for buying and 10 paisa for selling, closing at 73.18 and 73.87, respectively.

Open-market rates for dollar on Wednesday

BID                            Rs 277.07

OFFER                      Rs 279.57