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

The Pakistani rupee registered gains for the third consecutive session against the US dollar as it appreciated 0.04% in the inter-bank market on Thursday.

As per the State Bank of Pakistan (SBP), the rupee settled at 283.51 after an increase of Re0.10.

On Wednesday, the rupee recorded a slight gain to settle at 283.61 against the US dollar.

In a related development, the Asian Development Bank (ADB), in its latest report, ‘Asian Development Outlook (ADO)’, stated that Pakistan’s overall recovery is still constrained by moderate confidence and high inflation eroding purchasing power.

The bank said that Pakistan’s inflation rate averaged 28.5% over July–October, but is expected to ease amid fiscal consolidation and monetary tightening, as well as the improved availability of food and key imported inputs.

Globally, the US dollar was under pressure on Thursday after the Federal Reserve’s latest economic projections indicated that the interest-rate hike cycle has come to an end and lower borrowing costs are coming in 2024.

Fed Chair Jerome Powell said at Wednesday’s Federal Open Market Committee (FOMC) meeting that the historic tightening of monetary policy is likely over, with a discussion of cuts in borrowing costs coming “into view.”

Policymakers were nearly unanimous in their projections that borrowing costs would fall in 2024.

The US dollar index, which measures the greenback against a basket of currencies, was last 102.87 after dipping as low as 102.77 overnight.

Markets are now pricing in around a 75% chance of a rate cut in March, according to CME FedWatch tool, compared with 54% a week earlier.

Oil prices, a key indicator of currency parity, rose on Thursday, extending the previous session’s gains, on a bigger-than-expected weekly withdrawal from US crude storage and a weaker dollar after the US central bank signalled lower borrowing costs for 2024.

Brent futures was up $1, or 1.3%, to $75.26 a barrel as of 0900 GMT. US West Texas Intermediate (WTI) crude climbed 80 cents, or 1.1%, to $70.27.

Inter-bank market rates for dollar on Thursday

BID                            Rs 283.50

OFFER                      Rs 283.70

Open-market movement

In the open market, the PKR remained unchanged for both buying and selling against USD, closing at 281.50 and 284.50, respectively.

Against Euro, the PKR lost 1.50 rupee for both buying and selling, closing at 306.00 and 309.00, respectively.

Against UAE Dirham, the PKR lost 20 paisa for both buying and selling, closing at 77.60 and 78.30, respectively.

Against Saudi Riyal, the PKR lost 20 paisa for both buying and selling, closing at 75.50 and 76.20, respectively.

Open-market rates for dollar on Thursday

BID                            Rs 281.50

OFFER                      Rs 284.50