KARACHI: In the inter-bank market’s opening hours on Thursday, the Pakistani rupee strengthened by 0.04% against the US dollar.
In the inter-bank market, the rupee exhibited a rise of Re0.12, reaching 279.98 at 10:30 am.
On Wednesday, the Pakistani rupee experienced a notable upswing, settling at 280.1 against the US dollar, as reported by the State Bank of Pakistan (SBP). The day witnessed several positive economic developments locally.
The United Arab Emirates (UAE) extended its $2 billion deposits with Pakistan for an additional year, bolstering the nation’s foreign exchange reserves. Simultaneously, the International Monetary Fund (IMF) disbursed a $705 million loan tranche to Pakistan, according to the SBP. The request made by Pakistan to the UAE for the rollover of the $2 billion deposits, aimed at preventing depletion in foreign exchange reserves, was successfully met last week.
Furthermore, the country’s economic landscape demonstrated strength, with a December surplus of $397 million in the current account and a notable 35% surge in foreign direct investment (FDI) during the first half of FY24.
On a global scale, the US dollar maintained its position close to a one-month peak against major peers on Thursday. This was driven by robust US retail sales data, reinforcing expectations that the Federal Reserve would adopt a cautious approach in lowering interest rates. The US dollar index, gauging the currency against a basket of six rivals, showed minimal change at 103.36 in the Asian morning.
Market sentiment reflected a reduced likelihood of an initial Fed rate cut by March, dropping from 63.1% to 53.8%, according to CME’s FedWatch Tool. Despite this, the market continued to anticipate a potential 150 basis points of cuts by year-end, despite cautionary statements from Fed officials, including Governor Christopher Waller, against rapid policy loosening.
Oil prices exhibited an upward trend on Thursday, influenced by OPEC’s projection of robust global oil demand growth over the next two years. Brent crude futures gained 28 cents, reaching $78.16 a barrel, while US West Texas Intermediate crude futures (WTI) rose by 34 cents to $72.90. OPEC’s monthly report foresaw a significant increase in world oil demand, estimating a rise of 1.85 million barrels per day (bpd) in 2025, reaching 106.21 million bpd.
