The rupee registered a marginal decline against the US dollar, depreciating 0.02% in the inter-bank market on Monday.
As per the State Bank of Pakistan (SBP), the rupee closed at 279.64 after a decline of Re0.05 against the greenback.
During the previous week, the rupee continued its appreciation run for the 11th consecutive week as it gained Re0.31 or 0.11% to settle at 279.59 against the US dollar in the inter-bank market.
This marginal yet continuous recovery of the local unit has been on the back of approval of $705.6 million in the second tranche of the $3 billion Stand-by Arrangement (SBA) from the International Monetary Fund (IMF).
Last week, the IMF inflow was reflected in the foreign exchange reserves held by the SBP. Meanwhile, Caretaker Prime Minister Anwaar-ul-Haq Kakar directed the Ministry of Energy to prepare and submit a comprehensive and sustainable plan after consultation with the Finance Ministry to reduce the circular debt of power and gas sectors.
Moreover, the SBP decided to revamp the foreign exchange trading system and announced to introduce a Centralised Foreign Exchange (FX) Trading Platform called “FX Matching” for the interbank FX market.
Globally, the US dollar started the week on a steady footing as investors took stock of US economic data ahead of the Federal Reserve policy meeting this week, while escalating geopolitical tensions in the Middle East kept risk sentiment in check.
The dollar index, which measures the U.S. currency against six rivals, inched 0.01% higher to 103.55 on Monday, set for a 2% gain in January as traders temper expectations of early and deep U.S. interest rate cuts.
The Fed in December surprised markets by taking a dovish tone and projecting 75 basis points of rate cuts in 2024, resulting in markets pricing in early and steep easing, with a cut expected as early as March.
Oil prices, a key indicator of currency parity, dipped on Monday as China’s ailing property sector took another hit while a drone attack on US forces in Jordan added to supply disruption concerns in the Middle East and Houthi militants stepped up attacks on vessels in the Red Sea.
Brent crude futures dipped 23 cents to $83.32 a barrel by 0937 GMT while US West Texas Intermediate crude futures edged down by 27 cents to $77.74.
Inter-bank market rates for dollar on Monday
BID Rs 279.64
OFFER Rs 279.84
Open-market movement
In the open market, the PKR gained 16.00 paisa for buying and 7.00 paisa for selling against USD, closing at 279.02 and 281.09, respectively.
Against Euro, the PKR gained 73.00 paisa for buying and 61.00 paisa for selling, closing at 301.64 and 304.60, respectively.
Against UAE Dirham, the PKR gained 6.00 paisa for buying and 5.00 paisa for selling, closing at 76.26 and 76.95, respectively.
Against Saudi Riyal, the PKR gained 6.00 paisa for buying and 5.00 paisa for selling, closing at 74.35 and 74.99, respectively.
Open-market rates for dollar on Monday
BID Rs 279.02
OFFER Rs 281.09