The Pakistani rupee saw a marginal decline against the US dollar, depreciating 0.03% in the inter-bank market on Wednesday.
At close, the local unit settled at 278.26, a loss of Re0.08 against the greenback, as per the State Bank of Pakistan (SBP).
On Tuesday, the rupee closed at 278.18, up by Re0.02.
In a key development, Pakistan’s macroeconomic conditions improved during the first half of fiscal year 2024, the State of Pakistan’s economy report for the first half of FY24 released on Tuesday said.
The report said real GDP, driven by agriculture sector, grew by 1.7% in the first half of FY24 compared to 1.6% in the same period in FY23, and a contraction of 1.9% in the second half of FY23.
Internationally, the US dollar traded near a one-month low versus the euro on Wednesday amid lower Treasury yields as traders braced for a key US inflation report later in the day that could dictate the path of Federal Reserve policy.
The US dollar index – which measures the currency against six top rivals, but is heavily weighted towards the euro – was flat at 105.04 after a drop to a 1 1/2-week low of 104.95 on Tuesday.
The benchmark long-term US Treasury yield was little changed at 4.4472% after a 3 1/2-basis point (bp) retreat overnight.
Wednesday’s report on core consumer prices is expected to show CPI rose 0.3% month-on-month in April, down from a 0.4% growth the previous month.
Oil prices, a key indicator of currency parity, rose on Wednesday on expectations for higher demand as the US dollar weakened and a report showed US crude and gasoline inventories fell while the release of inflation data may point to a more supportive economic outlook.
Brent crude futures were up 39 cents, or 0.5%, at $82.77 a barrel at 0630 GMT.
US West Texas Intermediate crude futures (WTI) rose 42 cents, or 0.5%, to $78.44 a barrel.
US crude oil inventories fell by 3.104 million barrels in the week ended May 10, according to market sources citing American Petroleum Institute figures on Tuesday.
Inter-bank market rates for dollar on Wednesday
BID Rs 278.26
OFFER Rs 278.46
Open-market movement
In the open market, the PKR gained 9 paise for buying and 5 paise for selling against USD, closing at 276.93 and 279.45, respectively.
Against Euro, the PKR lost 1.07 rupee for buying and 91 paise for selling, closing at 298.12 and 300.72, respectively.
Against UAE Dirham, the PKR remained unchanged for buying and lost 1 paisa for selling, closing at 75.16 and 75.90, respectively.
Against Saudi Riyal, the PKR remained unchanged for both buying and selling, closing at 73.50 and 74.19, respectively.
Open-market rates for dollar on Wednesday
BID Rs 276.93
OFFER Rs 279.45