Rupee registers some gain against US dollar

The Pakistani rupee registered marginal improvement against the US dollar, appreciating 0.07% in the inter-bank market on Friday.

At close, the local unit settled at 278.21, a gain of Re0.19 against the greenback, as per the State Bank of Pakistan (SBP).

On Thursday, the rupee closed at 278.40, down by Re0.14.

In a key development, the government’s cost of borrowing and mark-up payments increased in the fiscal year 2022-23 consequent to an increase in the policy rate in response to inflation.

This was stated by the Budget Wing and Economic Adviser Wing (EAW) of the Finance Division in its Fiscal Policy Statement-January 2024 which was presented in the National Assembly on Thursday.

It added that the fiscal year 2023 has been unprecedented due to multiple challenges such as the international commodity super-cycle and balance of payments crisis, whereas, flood 2022 further intensified the macroeconomic vulnerabilities.

Internationally, the US dollar headed for its largest weekly fall versus the euro in two-and-a-half months on Friday as signs of cooling inflation and a softening US economy raised the prospect of rate cuts.

The euro is up 0.9% on the dollar this week, has broken above resistance around $1.0855 and traded as high as $1.0895 in the wake of US inflation posting a slowdown.

It was last at $1.0861.

April’s annual US inflation numbers met expectations but, since they were lower than the month before, they encouraged confidence that the Federal Reserve can cut interest rates in September and December – driving rallies in stocks and bonds and pressure on the dollar.