Inter-bank: rupee registers eighth consecutive gain against US dollar

The Pakistani rupee maintained its momentum against the US dollar for the eighth consecutive session as it appreciated 0.04% in the inter-bank market on Thursday.

As per the State Bank of Pakistan (SBP), the rupee settled at 282.79 after an increase of Re0.11.

On Wednesday, the rupee had registered a marginal gain to settle at 282.9 against the US dollar.

In a key development, the government raised a historic Rs397 billion ($1.4 billion) in Wednesday’s local currency bond auction.

Surpassing all expectations, this marked the highest borrowing in years in one auction, reflecting market interest despite December ending.

The investors’ substantial participation underscores their confidence in long-term bonds, driven by anticipation of an early 2024 rate cut. The government leveraged this opportunity, opting for long-term borrowing, effectively reducing rollover risks and minimising reliance on short-term funding in the future.

Globally, the US dollar found a footing on Thursday as a sudden end to a strong rally for US stocks had investors looking for safety.

Elsewhere heavy selling in the final hour of equities trade on Wall Street sent a ripple of risk-aversion through markets, lifting what had been an under-pressure greenback from lows.

Currency markets’ next focus is on Friday’s release of the US core personal consumption expenditure (PCE) index which is forecast by analysts to rise 0.2% in November with the annual inflation rate slowing to its lowest since 2021 at 3.3%.

Analysts suspect the balance of risk is on the downside and the slowdown in inflation means the Fed will have to ease policy just to stop real rates from rising.

The dollar index, down 1% for the year so far, was steady at 102.37 in early Asia trade on Thursday.

Oil prices, a key indicator of currency parity, fell on Thursday as concerns over low demand following a surprise US crude inventory build outweighed jitters over global trade disruptions due to tensions in the Middle East.

Brent crude futures fell 3 cents to $79.67 a barrel by 0753 GMT while US West Texas Intermediate crude was at $74.16 a barrel, also down 6 cents.

Inter-bank market rates for dollar on Thursday

BID                           Rs 282.80

OFFER                      Rs 283.00

Open-market movement

In the open market, the PKR gained 25 paisa for both buying and selling against USD, closing at 281.25 and 284.25, respectively.

Against Euro, the PKR gained 1.00 rupee for both buying and selling, closing at 306.00 and 309.00, respectively.

Against UAE Dirham, the PKR gained 50 paisa for buying and 40 paisa for selling, closing at 76.80 and 77.60, respectively.

Against Saudi Riyal, the PKR gained 20 paisa for both buying and selling, closing at 75.00 and 75.70, respectively.

Open-market rates for dollar on Thursday

BID                            Rs 281.25

OFFER                      Rs 284.25