10th successive gain: rupee settles at 294.90 against US dollar

The Pakistani rupee maintained its momentum for the 10th successive session against the US dollar, appreciating 0.36% in the inter-bank market on Tuesday.

As per the State Bank of Pakistan (SBP), the rupee settled at 294.9 after an increase of Rs1.05 in the inter-bank market.

On Monday, the rupee had appreciated 0.3% to settle at 295.95.

The rupee has been on a merry run in recent days, strengthening after it hit a record low of 307.1 in the inter-bank market. The change in fortune comes as authorities introduced reforms in the Exchange Companies’ (ECs) sector and reportedly also cracked down on smuggling, lending support to the currency markets.

The development slightly improves the outlook that had come under pressure over the ease in import restrictions that caused the current account deficit to widen in July.

“We expect PKR/USD in inter-bank market to be in the range of Rs320-340 by June 2024,” said Topline Securities in a report recently.

Globally, the US dollar edged broadly lower, though strayed not too far from a six-month peak hit against its major peers last week ahead of the Fed’s interest rate decision on Wednesday.

The dollar index slipped 0.04% to 105.04. Money markets expect the Fed to keep rates on hold at its upcoming meeting, according to the CME FedWatch tool, though focus will be on the central bank’s forward guidance.

“The market is fully pricing in a hold and this meeting was always likely to be a pass since the Fed skipped June, effectively moving to an every-other-meeting cadence,” said Erik Weisman, chief economist and portfolio manager at MFS Investment Management.

Oil prices, a key indicator of currency parity, rose on Tuesday for a fourth consecutive session as weak US shale output spurred further concerns about a supply deficit stemming from extended production cuts by Saudi Arabia and Russia.

Inter-bank market rates for dollar on Tuesday

BID Rs 294.90

OFFER Rs 295.10

Open-market movement

In the open market, the PKR gained 1.00 rupee for both buying and selling against USD, closing at 293.00 and 296.00, respectively.

Against Euro, the PKR remained unchanged for both buying and selling, closing at 315.00 and 318.00, respectively.

Against UAE Dirham, the PKR lost 70 paisa for both buying and selling, closing at 81.70 and 82.50, respectively.

Against Saudi Riyal, the PKR lost 10 paisa for buying and remained unchanged for selling, closing at 78.80 and 79.50, respectively.

Open-market rates for dollar on Tuesday

BID Rs 293.00

OFFER Rs 296.00