Rupee sees marginal decline against US dollar

The Pakistani rupee registered a marginal decline against the US dollar, depreciating 0.02% against the US dollar in the inter-bank market on Thursday.

At close, the currency settled at 278.17, a loss of Re0.06 against the greenback.

It is pertinent to mention that the currency market was closed on July 16-17 on account of Muharram holidays.

On Monday, the currency had settled at 278.11 against the greenback.

In a key development, the International Monetary Fund (IMF) said on Friday that it had reached a staff level agreement (SLA) with Pakistan for a $7-billion, 37-month loan programme aimed at cementing stability and inclusive growth.

On Tuesday, Moody’s Ratings said that the new International IMF programme will improve Pakistan’s (Caa3 stable) funding prospects, but warned Islamabad’s ability to sustain reform implementation will be key to unlock financing over the three-year duration.

Pakistan’s GDP growth is projected to hit 3.2% in the ongoing fiscal year FY2024-25, said BMI, a Fitch Solutions company, in its research titled ‘Pakistan Country Risk Report’. The forecast is slightly below the government’s targeted level of 3.6% growth this ongoing year.

Globally, the US dollar nursed broad losses as markets prepared for US rate cuts in a few months.

Interest rate markets are pricing more than 60 basis points of US interest rate cuts this year and some 20 basis points of hikes in Japan, narrowing the wide rates gap that had encouraged investors taking on large short positions in the yen.

Catril and other analysts also pointed to remarks from US presidential candidate Donald Trump - who described the dollar’s strength and the weakness of the yen and yuan as a big problem in a Bloomberg Businessweek interview - as rattling markets.

Oil prices, a key indicator of currency parity, extended gains on Thursday, buoyed by a bigger than expected decline in crude stocks in the United States, the world’s largest oil consumer.

Brent futures rose 41 cents, or 0.5%, to $85.49 a barrel by 0819 GMT and US West Texas Intermediate (WTI) crude was up 69 cents, or 0.8%, at $83.54, with both having registered gains in the previous session.

US crude inventories fell by 4.9 million barrels last week, data from the US Energy Information Administration showed on Wednesday.

Inter-bank market rates for dollar on Thursday

BID                            Rs 278.17

OFFER                      Rs 278.37

Open-market movement

In the open market, the PKR lost 1 paisa for buying and remained unchanged for selling against USD, closing at 279.00 and 280.50, respectively.

Against Euro, the PKR lost 92 paise for buying and 96 paise for selling, closing at 302.56 and 305.53, respectively.

Against UAE Dirham, the PKR gained 4 paise for buying and 3 paise for selling, closing at 75.56 and 76.30, respectively.

Against Saudi Riyal, the PKR gained 4 paise for buying and 1 paise for selling, closing at 73.80 and 74.51, respectively.

Open-market rates for dollar on Thursday

BID                            Rs 279.00

OFFER                      Rs 280.50