The Pakistani rupee saw a modest increase against the US dollar on Monday, appreciating by 0.05% during the early trading hours of the inter-bank market. By 10:20 AM, the rupee was valued at 277.50, reflecting a gain of Re0.14.
In contrast, the local currency had experienced a slight decline in the previous week, depreciating by Re0.12 or 0.04%. According to the State Bank of Pakistan (SBP), the rupee closed at 277.64, down from 277.52 the week before.
The International Monetary Fund (IMF) issued a staff report last week, highlighting significant risks to Pakistan’s ability to repay its debts. The report emphasized that the country remains critically reliant on effective policy implementation and timely external financing.
On the global front, the US dollar continued to gain strength in early Monday trading in Asia. The holiday in Japan reduced market liquidity, shifting attention to China’s disappointing weekend stimulus announcements. The dollar index rose slightly to 103.10, nearing last week’s peak, which is the highest level since mid-August. This rise comes as traders adjust their expectations regarding the Federal Reserve’s interest rate decisions for the remainder of the year.
After hitting a year-to-date low of 100.15 last month, the dollar index has gained traction amid expectations of a 25-basis-point rate cut from the Federal Reserve next month, rather than the 50 basis points enacted in September.
In related market activity, oil prices fell more than $1 per barrel, declining over 1.5% in early trading on Monday. Weak Chinese inflation data and uncertainty surrounding Beijing’s economic stimulus plans have raised concerns about demand.
Brent crude futures dropped $1.26, or 1.59%, to $77.78 per barrel, while US West Texas Intermediate crude futures fell $1.20, or 1.59%, to $74.36 per barrel.
Overall, negative news from China overshadowed concerns about potential disruptions in oil production due to tensions following Iran’s October 1 missile attack. The US has advised Israel against targeting Iranian energy infrastructure amidst these tensions.