Rupee registers marginal decline against US dollar

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

At close, the local unit settled at 278.30, a loss of Re0.09 against the greenback, as per the State Bank of Pakistan (SBP).

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.