The Pakistani rupee showcased resilience in the inter-bank market against the US dollar, marking a noteworthy uptick of 0.07% during the early trading hours on Tuesday.
The State Bank of Pakistan (SBP) reported that the rupee strengthened to 278.25 against the greenback, reflecting a gain of Rs15. This positive momentum follows Monday's closing where the rupee settled at 278.40, albeit marginally lower by Re0.01.
A pivotal development contributing to this currency boost stems from the International Monetary Fund's (IMF) completion of its final review of Pakistan’s economic reform programme.
The IMF, extending its support through a $3 billion Stand-By Arrangement (SBA), authorized the immediate disbursement of $1.1 billion. This decision underscores the global confidence in Pakistan's economic trajectory, particularly as the country continues to navigate through stabilization measures.
Furthermore, the stability in Pakistan's monetary policy, as affirmed by the Monetary Policy Committee (MPC) of the SBP, has contributed to bolstering investor confidence. The key interest rate remained unchanged at 22% for the seventh consecutive meeting.
This decision reflects a strategic move to sustain macroeconomic stability, consequently fostering improvements in inflation and the external position amidst a moderate economic recovery.
Internationally, market dynamics also influenced currency movements, notably the fluctuation in China’s yuan against the US dollar. Meanwhile, anticipation looms over the Federal Reserve's monetary policy meeting and China’s month-end Politburo meeting, with traders closely observing for insights into future currency trends.
In parallel, oil prices experienced a slight downturn following positive developments in ceasefire talks between Israel and Hamas, assuaging concerns of escalated conflict in the Middle East.
However, apprehensions surrounding the outlook for US interest rates continue to exert pressure on the market, influencing the trajectory of oil prices.
