The Pakistani rupee remained largely stable against the US dollar in the inter-bank market on Wednesday.
At close, the local unit settled at 279.32 after a loss of Re0.01 against the greenback, as per the State Bank of Pakistan (SBP).
On Tuesday, the rupee registered a marginal gain to settle at 279.31 against the US dollar, according to the SBP.
In a key development, Pakistan inched closer to the formation of a new government with various parties announcing their intention to join the other.
Former allies including Pakistan Muslim League-Nawaz (PML-N), Pakistan Peoples Party (PPP), Muttahida Qaumi Movement-Pakistan (MQM-P) and others on Tuesday announced to form a coalition government and also invited Pakistan Tehreek-e-Insaf (PTI) to enter “reconciliation” process for the sake of the country.
Globally, the US dollar traded near three-month highs to major peers on Wednesday as traders pushed back bets for a first Federal Reserve interest rate cut following surprisingly hot US inflation figures overnight.
The US currency’s push above 150 yen for the first time since Nov. 17 spurred Japan’s top currency diplomat to hint at the risk of intervention if “rapid,” “speculative” yen declines continue.
Federal funds futures currently price in no rate cut in March and a lower than 50% chance of easing in May, according to LSEG’s rate probability app, after the consumer price index (CPI) in January gained 3.1% from a year earlier, versus an estimated 2.9% rise.
Oil prices, a key indicator of currency parity, rose on Wednesday, reversing earlier losses, as major producer group OPEC kept to their relatively strong forecast for demand growth this year and an industry report showed a sharp decline in US fuel stockpiles amid a refinery outage.
Brent futures climbed 16 cents to $82.93 a barrel at 0808 GMT.
US West Texas Intermediate (WTI) crude futures rose 11 cents to $77.98 a barrel.
Inter-bank market rates for dollar on Wednesday
BID Rs 279.32
OFFER Rs 279.52
Open-market movement
In the open market, the PKR gained 1.00 paisa for buying and lost 27.00 paisa for selling against USD, closing at 279.14 and 281.59, respectively.
Against Euro, the PKR gained 1.12 rupee for buying and 1.18 rupee for selling, closing at 298.41 and 301.17, respectively.
Against UAE Dirham, the PKR gained 9.00 paisa for both buying and selling, closing at 76.05 and 76.75, respectively.
Against Saudi Riyal, the PKR lost 2.00 paisa for buying and 4.00 paisa for selling, closing at 74.27 and 74.95, respectively.
Open-market rates for dollar on Wednesday
BID Rs 279.14
OFFER Rs 281.59