Rupee registers marginal decline against US dollar

The Pakistani rupee registered a marginal decline against the US dollar, depreciating 0.03% in the inter-bank market on Monday.

At close, the local unit settled at 278.30, a loss of Re0.09 against the greenback, as per the State Bank of Pakistan (SBP).

After back-to-back positive weeks, the rupee saw a marginal decline as it depreciated Re0.09 or 0.03% against the US dollar during the previous week, according to the State Bank of Pakistan (SBP).

The local unit closed at 278.21, against 278.12 it had closed the week earlier against the greenback.

In a key development, sources told Business Recorder that the government has proposed to the International Monetary Fund (IMF) to increase income tax exemption threshold up to Rs1 million for salaried class.

There is a proposal to rationalise the tax rates for individuals by removing the salaried/ non-salaried distinction and reducing the number of rate slabs.

Internationally, the US dollar was broadly steady on Monday as investors awaited further clues to help chart the US interest rate path in the wake of cautious comments from Federal Reserve officials, even as inflation shows signs of cooling.

Data last week showed US consumer prices for April eased, leading to markets pricing in 50 basis points (bps), or at least two rate cuts this year, but various Fed officials have sounded words of caution about when rates may fall.

Traders, as a result, are betting on about 46 bps of easing this year, with only a rate cut in November fully priced in.

The dollar index, which measures the US currency against six rivals, was little changed at 104.46.

Oil prices, a key indicator of currency parity, extended gains on Monday amid political uncertainty in major producing countries after Iran’s president died in a helicopter crash and Saudi Arabia’s crown prince cancelled a trip to Japan, citing issues with the king’s health.

Brent gained 41 cents, or 0.5%, to $84.39 a barrel by 0632 GMT, after rising to $84.43 earlier, its highest since May 10.

US West Texas Intermediate (WTI) crude for June edged up 23 cents to $80.29 a barrel, after hitting $80.35 earlier, the highest since May 1.

The June contract expires on Tuesday and the more-active July contract was at $79.89, up 31 cents, or 0.4%.

Inter-bank market rates for dollar on Monday

BID                            Rs 278.30

OFFER                      Rs 278.50

Open-market movement

In the open market, the PKR gained 5 paise for buying and lost 4 paise for selling against USD, closing at 276.96 and 279.54, respectively.

Against Euro, the PKR lost 10 paise for buying and 31 paise for selling, closing at 299.81 and 302.70, respectively.

Against UAE Dirham, the PKR lost 1 paisa for buying and gained 1 paisa for selling, closing at 75.27 and 75.99, respectively.

Against Saudi Riyal, the PKR lost 1 paisa for buying and gained 1 paisa for selling, closing at 73.52 and 74.19, respectively.

Open-market rates for dollar on Monday

BID                            Rs 276.96

OFFER                      Rs 279.54