KARACHI: During Wednesday’s early trading hours in the inter-bank market, the Pakistani rupee slightly strengthened, marking a 0.09% gain against the US dollar.
At mid-morning, the rupee gained slightly against the US dollar, reaching 282.13 in the inter-bank market, marking an increase of Re0.24. Tuesday saw a marginal rise in the rupee, settling at 282.37 against the dollar. This fiscal year witnessed a significant 200% surge in cumulative borrowing by federal and provincial governments from the domestic banking system.
Globally, the US dollar faced pressure while the euro neared a four-month high amidst expectations of an impending Federal Reserve interest rate cut. With minimal year-end activity, trading volumes remained subdued, reflecting in the dollar index hovering near a five-month low at 101.54. The dollar is projected to end 2023 with a 1.9% decline, following consecutive years of robust gains due to Fed rate hikes combating inflation.
Anticipation of future Fed rate cuts dampened the dollar’s strength, with markets pricing in a 79% likelihood of rate cuts starting in March 2024. This sentiment led to a weakened dollar, impacting oil prices marginally. Brent crude futures held at $81.02 a barrel, while US West Texas Intermediate crude stood at $75.45 a barrel, with attention drawn to Red Sea developments despite ongoing tensions in the Middle East.