The Pakistani rupee recorded a marginal decline as it depreciated 0.02% against the US dollar in the inter-bank market on Thursday.
At close, the local unit settled at 279.38 after a loss of Re0.06 against the greenback, as per the State Bank of Pakistan (SBP).
On Wednesday, the rupee remained largely stable to settle at 279.32 against the US dollar, according to the SBP.
In a key development, Moody’s Investors Services (Moody’s) termed the persistence of political uncertainty in Pakistan following inconclusive election results a credit negative.
The rating agency in its latest report on Pakistan stated that overall, uncertainty around Pakistan’s ability to quickly negotiate a new International Monetary Fund (IMF) programme after the current one expires in April 2024 remains very high.
Pakistan’s government liquidity and external vulnerability risks will remain very high until there is clarity on a credible longer-term financing plan, it said.
Globally, the US dollar held below a three-month high on Thursday, as market players tried to gauge when the Federal Reserve will likely begin cutting interest rates as Fed officials weighed in on Tuesday’s inflation data.
While under renewed pressure this week, the yen kept off the three-month low hit against the dollar on Tuesday despite data showing Japan’s economy slipped into a recession as it unexpectedly shrank for two straight quarters on weak domestic demand.
The US inflation data pushed back bets on a first Fed rate cut to the middle of the year, after showing the US consumer price index (CPI) gained 3.1% in January on a year-on-year basis, compared with an expected 2.9% rise.
The market is currently pricing in no rate cut in March compared to 77% bets on rate cuts starting then a month ago, according to CME’s FedWatch tool.
Oil prices, a key indicator of currency parity, fell slightly on Thursday as the International Energy Agency (IEA) flagged slowing demand growth this year while a larger-than-expected jump in US crude inventories also weighed.
Brent crude futures fell 37 cents, or 0.5%, to $81.23 a barrel by 1008 GMT.
US West Texas Intermediate crude futures declined 44 cents, or 0.6%, to $76.20.
Inter-bank market rates for dollar on Thursday
BID Rs 279.38
OFFER Rs 279.58
Open-market movement
In the open market, the PKR lost 8.00 paisa for buying and 1.00 paisa for selling against USD, closing at 279.22 and 281.60, respectively.
Against Euro, the PKR lost 64.00 paisa for buying and 70.00 paisa for selling, closing at 299.05 and 301.87, respectively.
Against UAE Dirham, the PKR gained 3.00 paisa for buying and remained unchanged for selling, closing at 76.02 and 76.75, respectively.
Against Saudi Riyal, the PKR remained unchanged for both buying and selling, closing at 74.27 and 74.95, respectively.
Open-market rates for dollar on Thursday
BID Rs 279.22
OFFER Rs 281.60
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