The Pakistani rupee recorded a marginal decline against the US dollar, depreciating 0.03% in the inter-bank market on Monday.

At close, the local unit settled at 278.20, a loss of Re0.08 against the greenback, as per the State Bank of Pakistan (SBP).

During the previous week, the rupee registered a marginal increase as it gained Re0.09 or 0.03% against the US dollar.

The local unit closed at 278.12, against 278.21 it had closed the week earlier against the greenback.

Federal Finance Minister Muhammad Aurangzeb said on Sunday that improving tax-to-GDP ratio, fast privatisation of state-owned enterprises (SOEs) and overhauling the energy sector are priorities of the government.

Aurangzeb made the remarks in Lahore during a panel discussion at the Pre-Budget Conference held in collaboration with Business Recorder and the Federation of Pakistan Chambers of Commerce & Industry in Lahore.

Internationally, major currencies were steady on Monday with the dollar consolidating against peers, as market participants awaited US inflation data to assess the prospects of interest rate cuts this year.

After a softer-than-expected US payrolls report for April and a Federal Reserve policy announcement, expectations have increased for rate reductions this year.

Markets have priced in a 61.2% chance of some degree of rate reductions to begin at the Fed’s September meeting, with about 50 basis points of cuts in total expected, CME’s FedWatch Tool showed.

But comments by Fed officials last week were varied as speakers debated whether interest rates were high enough. A jump in consumers’ inflation expectations, revealed in a survey on Friday, could further complicate the conversation.

Oil prices, a key indicator of currency parity, were little changed on Monday after losing about $1 a barrel in the previous session on signs that US policymakers are likely to keep interest rates higher for longer.

Brent crude futures were up 21 cents at $83 a barrel by 1036 GMT. US West Texas Intermediate crude futures were up 27 cents at $78.53.

Although prices were supported by a few factors last week, including a lack of progress in the latest round of negotiations to halt hostilities in Gaza, economic factors are back in the spotlight.

Commentary from policymakers suggests that a lowering of borrowing costs is expected sooner in the UK and Europe than in the United States.

Inter-bank market rates for dollar on Monday

BID                            Rs 278.20

OFFER                      Rs 278.40

Open-market movement

In the open market, the PKR lost 36 paise for buying and 35 paise for selling against USD, closing at 277.01 and 279.55, respectively.

Against Euro, the PKR lost 65 paise for buying and 71 paise for selling, closing at 296.64 and 299.46, respectively.

Against UAE Dirham, the PKR lost 4 paise for buying and 6 paise for selling, closing at 75.15 and 75.89, respectively.

Against Saudi Riyal, the PKR lost 8 paise for buying and 9 paise for selling, closing at 73.50 and 74.19, respectively.

Open-market rates for dollar on Monday

BID                            Rs 277.01

OFFER                      Rs 279.55