In Monday’s interbank market, the Pakistani rupee experienced a substantial decrease against the US dollar. The State Bank of Pakistan (SBP) reported that the local currency closed at Rs287.09, down by Rs2.44 or 0.85 per cent.
Last week, the rupee had already depreciated by 0.3 per cent, closing at Rs284.65. During the week, the currency fell in four of the five sessions, with the only gain on Thursday, the day when an official from the finance ministry announced that the International Monetary Fund (IMF) had received a financing assurance from Saudi Arabia.
The recent drop in the value of the Pakistani rupee is partially due to the delay in the confirmation of funding from a friendly country. The staff-level agreement between Pakistan and the IMF is taking time solely because of this delay. The financing confirmation is crucial to bridge
Pakistan’s external account gap and meet the last condition of the IMF. Until then, the currency is likely to remain under pressure.
Meanwhile, globally, the US dollar began the week strongly after the release of US jobs data indicating a tight labour market. This firming up of expectations has led to predictions that the Federal Reserve will again raise interest rates at its meeting next month.
In the currency market, the dollar index, which measures the US currency against six major peers, rose 0.225 per cent to 102.25, recovering from the two-month low of 101.40 that the index touched last week.
Additionally, oil prices, a key indicator of currency parity, stabilised on Monday after rising for three consecutive weeks. This was due to looming supply cuts from Saudi Arabia and other OPEC+ producers, which balanced concerns about weakening global growth that may dampen fuel demand.