Rupee declines further against US dollar

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

At close, the local unit settled at 278.47, a loss of Re0.08 against the greenback, as per the State Bank of Pakistan (SBP).

On Tuesday, the rupee had closed at 278.39, down by Re0.09.

In a key development, the National Accounts Committee (NAC) approved provisional growth of gross domestic product (GDP) at 2.38% for the ongoing fiscal year 2023-24 against the budgetary projection of 3.5%.

Globally, the US dollar was steady against a handful of peers on Wednesday, as the market assessed calls for patience from Federal Reserve officials and awaited the publication of Fed minutes for more insight on the central bank’s path.

With little to drive the market in terms of economic data this week, major currencies continued to move in a tight range.

Investors have been shoring up rate cut bets after a milder inflation reading last week boosted expectations for US rate cuts this year.

Following a slew of Fed officials striking a cautious note, markets had about 43 basis points (bps) of easing priced in versus last week’s high of 52 bps.

Against a basket of major currencies, the dollar index was firm at 104.61 against a basket of currencies, after popping up briefly to 104.76 overnight.

Oil prices, a key indicator of currency parity, fell over 1% on Wednesday, retreating for a third straight day on expectations the Federal Reserve might keep US interest rates higher for longer due to sustained inflation, potentially impacting fuel use in the world’s largest consumer.

The market also slipped as US crude oil and gasoline inventories rose last week, according to market sources citing American Petroleum Institute (API) figures on Tuesday.