In a much-awaited turnaround, the Pakistani rupee has put an end to its ten-session losing streak against the US dollar, managing to secure a marginal gain to settle at 305.47. This shift comes as a breath of fresh air for Pakistan’s financial markets, which have witnessed a steady depreciation of the national currency in recent days.
As per the State Bank of Pakistan (SBP), the rupee saw an increase of Re0.07, equivalent to 0.02%. This positive development follows Thursday’s record low, where the rupee had closed at 305.54 against the US dollar in the inter-bank market.
In an important clarification, the State Bank of Pakistan (SBP) took a stance against media reports speculating an emergency meeting of the Monetary Policy Committee (MPC). The SBP categorically dismissed these reports as “completely baseless” and emphasized that only the MPC, as an independent statutory body, holds the authority to decide on the policy rate. The next MPC meeting is scheduled for September 14, 2023, reinforcing the SBP’s commitment to a structured and transparent decision-making process.
On the international front, the US dollar appeared to be on the verge of ending a six-week winning streak against major currencies. This development coincided with the anticipation of a crucial monthly U.S. jobs report, expected to significantly influence Federal Reserve policy decisions in the coming months. Recent data on employment and inflation had hinted at potential weaknesses, leading traders to reduce their expectations of a rate hike on September 20th from 18% to 12%, according to the CME Group’s FedWatch tool.
The US dollar index, which gauges the currency against a basket of six developed-market peers, including the euro, sterling, and yen, experienced a slight dip of 0.05% on Friday, culminating in a weekly decline of 0.53%.
Meanwhile, oil prices, a pivotal indicator of currency parity, held steady above $87 a barrel. This resilience in crude prices hinted at the end of a two-week losing streak, buoyed by optimistic forecasts of tightening supplies.