Rupee remains largely unchanged against US dollar

The Pakistani rupee remained largely stable against the US dollar in the inter-bank market on Thursday.

At close, the local unit settled at 278.40, up by Re0.01 against the greenback, as per the State Bank of Pakistan (SBP).

On Wednesday, the rupee registered marginal improvement to settle at 278.41 against the US dollar, according to the SBP.

In a key development, Prime Minister Shehbaz Sharif on Wednesday said Pakistan needs another International Monetary Fund (IMF) programme to revive the economy and put the country on the path to development.

While speaking at the cabinet meeting, the prime minister said rising electricity and gas theft, low tax-to-GDP ratio and rapid increase in expenditure need to be dealt with seriously.

Internationally, the US dollar fell broadly on Thursday after the US Federal Reserve maintained its interest rate cut projections for the year in the face of upside surprises on inflation, and did not strike a more hawkish tone as some investors had feared.

At the conclusion of the Fed’s policy meeting on Wednesday, Chair Jerome Powell said recent high inflation rate readings had not changed the underlying “story” of slowly easing price pressures in the US as the central bank stayed on track for three rate cuts this year, even though it projected slightly slower progress on inflation.

That knocked the greenback lower as traders were quick to rebuild bets of a Fed easing cycle beginning in June, with markets now pricing in a 75% chance of a rate cut that month, as compared to 59% chance a day ago, according to the CME FedWatch tool.

The dollar index was flat at 103.23, after having slid more than 0.5% in the previous trading session.

Oil prices, a key indicator of currency parity, rebounded on Thursday as US crude and gasoline stock drawdowns lent support despite signs that the US Federal Reserve may keep interest rates higher for longer.

Brent crude futures for May rose 46 cents, or 0.5%, to $86.41 a barrel by 0730 GMT, after falling 1.6% on Wednesday.

US West Texas Intermediate futures for May climbed 38 cents, or 0.5%, to $81.65 a barrel, after sliding about 1.8% in the previous session.

Inter-bank market rates for dollar on Thursday

BID                            Rs 278.40

OFFER                      Rs 278.60

Open-market movement

In the open market, the PKR gained 24.00 paisa for buying and 26.00 paisa for selling against USD, closing at 278.24 and 280.86, respectively.

Against Euro, the PKR lost 1.36 rupee for buying and 1.39 rupee for selling, closing at 302.14 and 305.06, respectively.

Against UAE Dirham, the PKR gained 2.00 paisa for both buying and selling, closing at 75.55 and 76.28, respectively.

Against Saudi Riyal, the PKR gained 4.00 paisa for buying and 3.00 paisa for selling, closing at 73.80 and 74.50, respectively.

Open-market rates for dollar on Thursday

BID                            Rs 278.24

OFFER                      Rs 280.86