Rupee sees marginal decline against US dollar

The Pakistani rupee saw a marginal decline against the US dollar, depreciating 0.05% in the inter-bank market on Thursday.

At close, the local unit settled at 278.4, a loss of Re0.14 against the greenback, as per the State Bank of Pakistan (SBP).

On Wednesday, the rupee closed at 278.26, down by Re0.08.

In a key development, well-informed sources in CPPA-G told Business Recorder that Power Division has reportedly obtained Prime Minister’s approval to further enhance electricity tariff, i.e., up to 10% of the total cost and reduction of variable charges to ensure tariff remains neutral for end consumers, besides recovery of taxes from relevant segments instead of through electricity bills and winding up the poorly performing NTDC.

Globally, the US dollar skidded to multi-month lows on Thursday after US core inflation hit its slowest in three years and retail sales turned flat, which pulled forward expectations for rate cuts in the world’s biggest economy.

Core US inflation slowed to an annualised 3.6% in April, Wednesday’s data showed, in line with market expectations.

That is well above the Federal Reserve’s 2% goal, but since it eased from 3.8% a month earlier investors saw it as opening the way for a rate cut as soon as September or perhaps even earlier, as the US presidential election looms in November.

The US dollar index made its heaviest one-day percentage drop for the year so far overnight, falling 0.75% and through its 200-day moving average.

Oil prices, a key indicator of currency parity, held steady on Thursday, bolstered by signs of stronger demand in the US after slower than expected inflation in April and lower oil stocks in the past week. Brent crude futures fell 25 cents, or 0.3%, to $82.50 a barrel by 0951 GMT.

US West Texas Intermediate crude (WTI) shed 26 cents, or 0.33%, to $78.37.

Brent had touched an intra-day low of $81.05 on Wednesday - the lowest the front-month futures contract has traded since Feb. 26 - but recovered to about 0.5% higher on the day.

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 lost 3 paise for buying and 9 paise for selling against USD, closing at 276.96 and 279.54, respectively.

Against Euro, the PKR lost 1.95 rupee for buying and 2.27 rupees for selling, closing at 300.07 and 302.99, respectively.

Against UAE Dirham, the PKR lost 14 paise for buying and 13 paise for selling, closing at 75.30 and 76.03, respectively.

Against Saudi Riyal, the PKR lost 11 paise for both buying and selling, closing at 73.61 and 74.30, respectively.

Open-market rates for dollar on Thursday

BID                            Rs 276.96

OFFER                      Rs 279.54