The Pakistani rupee registered a marginal decline against the US dollar, depreciating 0.05% in the inter-bank market on Wednesday.
At close, the currency settled at 278.45, a loss of Re0.13 against the US dollar.
On Tuesday, the rupee had settled at 278.32 against the dollar, according to the State Bank of Pakistan (SBP).
In recent months, the domestic currency has largely been around 277-279 as traders keep an eye on approval from the International Monetary Fund’s (IMF) Executive Board over a new $7-billion Extended Fund Facility.
In a positive development, Moody’s Ratings upgraded the government of Pakistan’s local and foreign currency issuer and senior unsecured debt ratings to Caa2 from Caa3. It also said it expects IMF approval for Pakistan’s $7-billion Extended Fund Facility in a few weeks.
Internationally, the US dollar held near its lowest level in more than a year against a basket of peers on Wednesday, with sterling trading just off multi-year highs, as markets focused on clues to the size of a widely expected US interest rate cut next month.
Overall moves in the foreign exchange market were muted as traders awaited fresh hints on the state of the world’s largest economy.
Investors are unanimous in bets that the Federal Reserve will begin cutting interest rates next month following Chair Jerome Powell’s dovish tilt last week, with the debate now centred on whether or not it will be a super-sized 50-basis point cut.
The current pricing sits at a 36% chance for the larger cut, up from 29% a week ago, according to the CME Group’s FedWatch Tool.
Markets, which are fully priced for a 25-basis point cut next month, see just over 100 basis points worth of easing by the end of the year.
The dollar index, which measures the greenback against a basket of currencies, was last 0.07% higher at 100.67, hovering above a 13-month low of 100.51 hit in the previous session.
For the month, the dollar has fallen over 3%, putting it on track for its biggest monthly decline since November 2022.
Oil prices, a key indicator of currency parity, was little changed on Wednesday after a sharp drop in the previous session ended a three-day streak of gains, amid persistent concerns over potential supply losses from the Middle East and North Africa as well as global fuel demand worries.
Brent crude futures were up 8 cents at $79.63 a barrel at 0653 GMT.
US West Texas Intermediate crude futures up 7 cents to trade at $75.60.
Inter-bank market rates for dollar on Wednesday
BID Rs 278.45
OFFER Rs 278.65
Open-market movement
In the open market, the PKR gained 2 paise for buying and remained unchanged for selling against USD, closing at 279.13 and 280.00, respectively.
Against Euro, the PKR gained 63 paise for buying and 60 paise for
selling, closing at 309.34 and 311.34, respectively.
Against UAE Dirham, the PKR gained 1 paisa for buying and remained unchanged for selling, closing at 75.79 and 76.22, respectively.
Against Saudi Riyal, the PKR lost 2 paise for buying and remained unchanged for selling, closing at 74.03 and 74.42, respectively.
Open-market rates for dollar on Wednesday
BID Rs 279.13
OFFER Rs 280.00
American Dollar Exchange Rate