The Pakistani rupee registered a marginal gain against the US dollar, appreciating 0.04% against the US dollar during the opening hours of trading in the inter-bank market on Monday.
At 10am, the rupee was hovering at 278.10, a gain of Re0.11 against the greenback.
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 media 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, inching up amid political uncertainty at major producing countries after Iran’s president was feared dead in a helicopter crash and the Saudi crown prince cancelled a Japan trip, citing health issues with the king.
Brent gained 32 cents, or 0.4%, to $84.30 a barrel by 0240 GMT, its highest since May 10.
American Dollar Exchange Rate