Rupee sees marginal increase against US dollar

The rupee registered marginal improvement against the US dollar, appreciating 0.04% in the inter-bank market on Monday.

At close, the local unit settled at 278.63, up by Re0.11 against the greenback, as per the State Bank of Pakistan (SBP).

During the previous week, the rupee increased marginally as it gained Re0.30 or 0.10% against the US dollar in the inter-bank market.

The local unit closed the week at 278.74 level, compared to 279.04 it had closed the week earlier against the greenback.

In a key development, it was learned that Pakistan is likely to sign the staff-level agreement with the International Monetary Fund (IMF) next week.

The signing of staff level agreement with the IMF will clear the way for Pakistan to receive the last tranche of $1.1 billion under the SBA Agreement, sources told Business Recorder.

They further said that during the talks with the IMF, Pakistan’s officials assured the international lender of jacking up electricity tariff from July 1, while monthly, quarterly, and yearly fuel adjustments will be slapped on consumers for cost recovery.

Internationally, the US dollar was steady on Monday as traders looked ahead to a week dominated by central bank meetings worldwide, with the Bank of Japan seemingly on the brink of ending negative rates and the focus on how many rate cuts the Federal Reserve projects.

Apart from Japan and the United States, central banks in England, Australia, Norway, Switzerland, Mexico, Brazil and Indonesia are all due to meet, with most expected to stand pat on rates.

The spotlight in Asia is firmly on the BOJ as the bigger-than-expected pay hikes by major Japanese firms cemented expectations that the central bank is set to herald a new era by ending negative interest rate policy, potentially as soon as this week.

The dollar index, which measures the US currency against six rivals including the euro and yen, was at 103.48, having risen to 103.50, its highest since March 6 ahead of the Fed’s meeting this week.

Internal preparations for an exit have been in the works since Kazuo Ueda took office as BOJ governor in April last year, and were mostly done by year-end, sources familiar with the bank’s thinking told Reuters.

Oil prices, a key indicator of currency parity, ticked up in Asian trade on Monday, extending gains from last week of nearly 4% on the view that supply was tightening, with the risks heightened by further attacks on Russian energy infrastructure.

Brent crude oil futures for May delivery climbed 47 cents, or 0.5%, to $85.81 a barrel by 0720 GMT.

The April contract for US West Texas Intermediate (WTI) crude was up 49 cents, or 0.6%, at $81.53.

Inter-bank market rates for dollar on Monday

BID                            Rs 278.63

OFFER                      Rs 278.83

Open-market movement

In the open market, the PKR gained 7.00 paisa for buying and remained unchanged for selling against USD, closing at 278.60 and 281.20, respectively.

Against Euro, the PKR gained 2.00 paisa for buying and 7.00 paisa for selling, closing at 301.67 and 304.49, respectively.

Against UAE Dirham, the PKR gained 9.00 paisa for both buying and selling, closing at 75.65 and 76.38, respectively.

Against Saudi Riyal, the PKR gained 12.00 paisa for buying and 10.00 paisa for selling, closing at 73.90 and 74.58, respectively.

Open-market rates for dollar on Monday

BID                            Rs 278.60

OFFER                      Rs 281.20