The Pakistani rupee remained relatively stable against the US dollar on Tuesday, depreciating slightly by 0.01% during the early trading hours in the inter-bank market. As of 10:10am, the rupee was trading at 278.53, down by Re0.03 from the previous closing rate of 278.50.
In a significant development, the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) reduced the key policy rate by 100 basis points to 19.5% on Monday. This marks the second consecutive rate cut by the SBP.
Globally, the US dollar and yen remained within narrow ranges as traders awaited upcoming central bank decisions, including the midweek meetings of the Bank of Japan and the Federal Reserve. The Fed is expected to maintain current rates at its Wednesday meeting, but market speculation suggests a potential rate cut at the September meeting. Investors will be attentive to any signals from Fed Chair Jerome Powell regarding future rate cuts.
The dollar index, which tracks the US dollar against a basket of currencies, was stable at 104.56.
Oil prices, a critical factor in currency value, continued to decline on Tuesday due to concerns about demand in China, the largest global crude importer, and despite the ongoing risk of conflict in the Middle East. Brent crude oil futures fell by 32 cents to $79.46 per barrel, while US crude futures dropped 36 cents to $75.45 per barrel.
