KARACHI: On Monday, within the inter-bank market, the Pakistani rupee saw a slight increase against the US dollar, marking a 0.11% appreciation during the opening hours.
At 10:15 am, the rupee stood at 281.08 in the inter-bank market, marking an increase of Re0.32. Throughout the previous week, the rupee saw a growth of 0.16%, equivalent to Re0.46, settling at 281.40 against the US dollar in the inter-bank market. This positive trajectory extended for the eighth consecutive week, buoyed by the announcement of a staff-level agreement between Pakistan and the International Monetary Fund (IMF) regarding the first review of the $3 billion Stand-by Arrangement (SBA).
Additionally, during the same week, data from the State Bank of Pakistan (SBP) revealed a noteworthy uptick in foreign exchange reserves held by the central bank, soaring by $464 million on a weekly basis to a total of $8.2 billion as of December 29.
On a global scale, the stability of the US dollar prevailed on Monday, preceding a crucial US inflation report later in the week. This report was anticipated to offer further insights into the Federal Reserve’s monetary policy outlook. Earlier market speculations of rate cuts were moderated, contributing to a tentative start to the year.
The dollar’s resurgence was supported by an upswing in U.S. Treasury yields as traders moderated their expectations regarding the pace and magnitude of Fed cuts for the year. However, the narrative might shift post a US inflation report scheduled for Thursday, following recent data indicating more robust than anticipated employment rates and wage increments in December. This suggests a persistently resilient labor market.
Contrarily, another survey conducted the same day highlighted a significant slowdown in the U.S. services sector the previous month, notably displaying a marked decline in employment to its lowest level in nearly 3-1/2 years. This paints a mixed picture of the world’s largest economy.
Meanwhile, oil prices, a crucial gauge of currency parity, experienced a decline of over 1% on Monday. This was primarily influenced by substantial price reductions by leading exporter Saudi Arabia and an upsurge in OPEC output, countering concerns regarding escalating geopolitical tensions in the Middle East. Brent crude diminished by 1.09%, settling at $77.90 a barrel by 0344 GMT, while US West Texas Intermediate crude futures saw a drop of 1.15%, reaching $72.96 a barrel.
