Rupee registers marginal gain against US dollar

The Pakistani rupee registered marginal improvement, appreciating 0.03% against the US dollar in the inter-bank market on Tuesday.

At close, the local unit settled at 278.31, a gain of Re0.09 against the greenback, as per the State Bank of Pakistan (SBP).

On Monday, the rupee closed at 278.40, lower by Re0.01.

In a key development, the International Monetary Fund (IMF) on Monday completed its final review of Pakistan’s economic reform programme supported by a $3 billion Stand-By Arrangement (SBA) and allowed the immediate disbursement of $1.1 billion.

“Today, the Executive Board of the International Monetary Fund completed the second and final review of Pakistan’s economic reform programme supported by the IMF’s Stand-By Arrangement. The Board’s decision allows for an immediate disbursement of SDR 828 million (around $1.1 billion), bringing total disbursements under the arrangement to SDR 2.250 billion (about $3 billion),” IMF said in its statement.

The decision comes after Pakistani authorities reached a staff-level agreement with the IMF on the second and final review of the SBA last month.

Moreover, the Monetary Policy Committee (MPC) of the SBP kept the key interest rate steady at 22% for the seventh straight meeting.

“The Committee noted that macroeconomic stabilisation measures are contributing to considerable improvement in both inflation and external position, amidst moderate economic recovery,” in the press release issued on Monday.

Internationally, China’s yuan pulled back against the US dollar on Tuesday, having hit one-month high a day earlier as traders were reluctant to place any substantial bets ahead of the long Labor Day holiday and the Federal Reserve’s monetary policy meeting this week.

Markets are also keeping a close watch on the upcoming Fed policy meeting and China’s month-end Politburo meeting for more clues on the currency’s movements, traders said.

The Fed is expected to hold rates at 5.25%-5.5%, but markets will pay close attention to comments from policymakers that could shed light on the monetary policy trajectory in the world’s largest economy.

Oil prices, a key indicator of currency parity, steadied on Tuesday after the previous day’s drop as Israel-Hamas talks offered hopes of a ceasefire even as Red Sea attacks continued, while investors awaited signals on US interest rates ahead of a key meeting on Wednesday.

Brent crude futures rose 27 cents, or 0.3%, to $88.67 a barrel at 0830 GMT, while US West Texas Intermediate crude futures gained 30 cents, or 0.4%, to $82.93 a barrel.

Inter-bank market rates for dollar on Tuesday

BID                            Rs 278.31

OFFER                      Rs 278.51

Open-market movement

In the open market, the PKR gained 8 paisa for buying and 5 paisa for selling against USD, closing at 276.92 and 279.63, respectively.

Against Euro, the PKR gained 38 paisa for buying and 42 paisa for selling, closing at 294.22 and 296.93, respectively.

Against UAE Dirham, the PKR lost 2 paisa for buying and 1 paisa for selling, closing at 75.03 and 75.75, respectively.

Against Saudi Riyal, the PKR lost 1 paisa for buying and gained 2 paisa for selling, closing at 73.28 and 73.94, respectively.

Open-market rates for dollar on Tuesday

BID                            Rs 276.92

OFFER                      Rs 279.63