The Pakistani rupee experienced a slight depreciation against the US dollar, declining by 0.03% during the early hours of trading in the inter-bank market on Monday. At 10:20 am, the local currency was valued at 278.28, reflecting a decrease of Re0.08 against the greenback.
Recent Currency Performance
Last week, the rupee saw a marginal improvement, gaining Re0.13 or 0.04% against the US dollar. It closed at 278.20, up from the previous week’s close of 278.33, according to the State Bank of Pakistan (SBP). In recent weeks, the rupee has remained relatively stable, fluctuating between 277-279 against the dollar as Pakistan progresses with its efforts to secure an extended International Monetary Fund (IMF) bailout program. The IMF recently stated that discussions with Pakistani authorities are ongoing virtually, aiming to reach a staff-level agreement (SLA) on a new program.
Global Economic Influences
Internationally, the euro weakened on Monday following French President Emmanuel Macron’s unexpected election call after his party’s poor performance in the European Union elections against the far-right. Meanwhile, the US dollar remained steady ahead of the Federal Reserve meeting later in the week.
US nonfarm payrolls increased by 272,000 jobs last month, surpassing economists’ forecasts of 185,000, as polled by Reuters. The dollar index, which tracks the US currency against six other major currencies, rose to 105.09, the highest level since May 30, following a 0.8% rise on Friday after the release of stronger-than-expected job data.
Oil Prices and Market Impact
Oil prices, a significant factor in currency parity, edged higher on Monday, supported by expectations of increased fuel demand during the summer despite being tempered by a stronger dollar. Brent crude futures rose by 28 cents, or 0.4%, to $79.90 a barrel, while US West Texas Intermediate crude futures increased by 26 cents, or 0.3%, to $75.79 a barrel.
The robust US jobs data on Friday led investors to adjust their expectations for interest rate cuts, contributing to the dollar’s rally.
