Rupee registers marginal improvement against US dollar

The Pakistani rupee remained largely stable against the US dollar, appreciating 0.03% in the inter-bank market on Wednesday.

At close, the currency settled at 278.04, a gain of Re0.09 against the US dollar.

On Monday, the rupee had settled at 278.13, according to the State Bank of Pakistan (SBP).

The currency market was closed on Tuesday on account of the Eid Milad-un Nabi holiday.

The currency market is now factoring in the International Monetary Fund (IMF) Executive Board meeting that is scheduled to take Pakistan’s 37-month Extended Fund Facility (EFF) of about $7 billion on its agenda on September 25.

Internationally, the US dollar wavered on Wednesday, while the yen regained some lost ground as investors made last-minute tweaks to positions ahead of a policy meeting expected to begin a US easing cycle.

The Federal Reserve was expected to make its first interest rate cut in more than four years at 1800 GMT, with markets pricing a 2/3 probability of a 50 basis point cut.

The dollar has fallen along with US yields since July and at $1.1125 per euro is not far from the year’s low at $1.1201 in anticipation of US easing at a clip, with more than 100 basis points of rate cuts priced in by Christmas.

Traders say the Fed’s tone as well as the size of the rate cut will drive the reaction in the foreign exchange market.

Oil prices, a key indicator of currency parity, fell on Wednesday after two sessions of gains after an industry report showed increasing US crude and fuel inventories, offsetting rising tension in the Middle East and the potentially bullish impact of a US interest rate cut.

US crude stocks rose by 1.96 million barrels in the week ended Sept. 13, market sources said on Tuesday citing American Petroleum Institute figures.

Gasoline and distillates inventories also increased.

Inter-bank market rates for dollar on Wednesday

BID                            Rs 278.04

OFFER                      Rs 278.24

Open-market movement

In the open market, the PKR gained 12 paise for buying and 5 paise for selling against USD, closing at 279.48 and 280.70, respectively.

Against Euro, the PKR lost 2 paise for buying and gained 5 paise for selling, closing at 308.82 and 311.71, respectively.

Against UAE Dirham, the PKR gained 5 paise for both buying and selling, closing at 75.55 and 76.30, respectively.

Against Saudi Riyal, the PKR gained 7 paise for buying and 5 paise for selling, closing at 73.84 and 74.56, respectively.

Open-market rates for dollar on Wednesday

BID                            Rs 279.48

OFFER                      Rs 280.70