KARACHI: During the initial trading hours on Monday in the inter-bank market, the Pakistani rupee experienced a slight uptick of 0.21% against the US dollar. By 10:30 am, the rupee stood at 279.78, reflecting a gain of Re0.58.
Throughout the preceding week, the Pakistani rupee maintained its upward trajectory against the US dollar, experiencing a gain of Rs1.04 or 0.37%, ultimately settling at 280.36 in the inter-bank market. This surge in value can be attributed to the announcement of a staff-level agreement (SLA) between Pakistan and the International Monetary Fund (IMF) regarding the first review of the $3 billion Stand-by Arrangement (SBA), resulting in the approval of the second tranche of the financial package.
The IMF Executive Board concluded the first review of the SBA last week, leading to the immediate disbursement of $700 million. Concurrently, as of January 5, the foreign exchange reserves held by the State Bank of Pakistan stood at $8.15 billion, with expectations of a further increase due to incoming IMF inflows.
On the global front, the US dollar receded on Monday amid renewed speculations of a potential rate cut by the Federal Reserve in March. Simultaneously, the Chinese yuan faced challenges, hovering near a one-month low ahead of impending economic data releases throughout the week.
The anticipation of a Fed rate cut gained momentum following unexpected declines in US producer prices for December, causing a slide in US Treasury yields. The US dollar index remained relatively flat at 102.50, exhibiting limited movement in recent sessions.
In the realm of oil prices, a pivotal gauge of currency dynamics, there was a marginal increase on Monday. Traders monitored the Middle East for potential supply disruptions after US and British forces intervened to prevent Houthi attacks on ships in the Red Sea. Brent crude futures rose by 13 cents (0.2%) to $78.42 a barrel, following a 1.1% increase on Friday, while US West Texas Intermediate crude stood at $72.73 a barrel, up 5 cents (0.1%) after a nearly 1% gain in the previous session.
