Rupee sees marginal decline against US dollar

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

At close, the local unit settled at 278.3, a fall of Re0.09 against the greenback, as per the State Bank of Pakistan (SBP).

During the previous week, the rupee closed unchanged at 278.21 against the US dollar as compared to the week earlier when the local unit had stood at the same level.

In recent weeks, the domestic currency has largely been around 277-278 against the dollar as Pakistan moves forward with its plan to win a longer and longer International Monetary Fund (IMF) bailout programme.

Pakistan authorities and the IMF have made “significant progress” towards reaching a staff-level agreement (SLA) on a new programme, an end-of-mission statement posted on the lender’s website read.

Globally, the US dollar made a steady start to the week, as investors were focused on US, European and Japanese inflation data to guide the global interest rate outlook.

Foreign exchange trade has been dominated by the hunt for “carry” in recent months, punishing low-rate currencies and supporting the dollar while US data has blown hot and cold and dented policymakers’ confidence on the rates outlook.

The dollar had fallen back after data showed a slowdown in consumer price rises in April and disappointing retail sales, before strengthening last week thanks to better-than-expected PMI survey data.

Oil prices, a key indicator of currency parity, were little changed on Monday, making marginal advances in muted trade owing to public holidays in Britain and United States after a downbeat week characterised by the outlook for US interest rates in the face of sticky inflation.

The Brent crude July contract was up 21 cents at $82.33 a barrel by 0926 GMT.

The more active August contract rose 26 cents to $82.10. US West Texas Intermediate (WTI) crude futures were up 23 cents at $77.95.

Brent lost about 2% last week and WTI nearly 3% after Federal Reserve minutes showed some officials would be willing to raise interest rates further if it were deemed necessary to control stubbornly high inflation.

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 lost 7 paise for buying and 12 paise for selling against USD, closing at 277.02 and 279.48, respectively.

Against Euro, the PKR lost 49 paise for buying and 67 paise for selling, closing at 299.22 and 302.16, respectively.

Against UAE Dirham, the PKR lost 9 paise for both buying and selling, closing at 75.25 and 75.99, respectively.

Against Saudi Riyal, the PKR lost 8 paise for buying and 10 paise for selling, closing at 73.49 and 74.20, respectively.

Open-market rates for dollar on Monday

BID                            Rs 277.02

OFFER                      Rs 279.48