The Pakistani rupee exhibited a slight appreciation of 0.07% against the US dollar during early trading hours in the inter-bank market on Tuesday. By 10:20 AM, the currency stood at 278.25, reflecting a gain of Re0.19 from the previous day’s closing value of 278.44, as reported by the State Bank of Pakistan (SBP).
This modest improvement follows a recent trend where the domestic currency has hovered between 277-279 against the dollar. Market participants continue to monitor positive economic indicators closely, while uncertainty looms over the final approval of Pakistan’s $7 billion bailout package from the International Monetary Fund (IMF). Despite the release of the IMF Executive Board’s schedule through August 28, Pakistan’s name remains absent from the agenda, raising concerns about the timeline for the loan disbursement.
Globally, the US dollar experienced volatility, hovering near a seven-month low on Tuesday amid expectations that the US Federal Reserve might begin cutting interest rates as early as next month. Market focus this week is centered on Federal Reserve Chair Jerome Powell’s upcoming speech at Jackson Hole and the release of the Fed’s last meeting minutes, which could provide insights into the direction of interest rate cuts. Currently, traders anticipate a 25-basis-point cut in September with a probability of 75.5%, according to the CME FedWatch Tool.
Meanwhile, oil prices—a critical factor influencing currency parity—slipped on Tuesday. Brent crude was down 0.7% to $77.13 a barrel, while US West Texas Intermediate crude futures fell to $73.87 a barrel. The decrease in oil prices followed Israel’s acceptance of a proposal to resolve disputes hindering a ceasefire agreement in Gaza, which eased concerns over potential supply disruptions in the Middle East.
The overall sentiment in the currency market remains cautious as investors await further developments in the global economic landscape and the finalization of Pakistan’s IMF bailout package.
