Interbank closing: PKR edges up by 0.1 per cent against US dollar

WEB DESK: The Pakistani rupee (PKR) showed a slight improvement against the US dollar (USD) in the inter-bank market on Friday, appreciating by 0.1 per cent.

Closing at 278.14, the local currency gained Re0.27 against the greenback, according to the State Bank of Pakistan (SBP).

This uptick follows Thursday’s marginal improvement, where the rupee settled at 278.41 against the US dollar, as reported by the SBP.

Data from the Economic Affairs Division (EAD) reveals that Pakistan has borrowed $6.678 billion from various financing sources during the first eight months (July-February) of the current fiscal year 2023-24.

This amount is lower compared to the $7.407 billion borrowed during the same period in 2022-23.

Globally, the US dollar maintained its strength for a second consecutive week. Despite a rate hike in Japan, investors perceive US rates as relatively high and stable.

The US Federal Reserve opted to keep its funds rate steady between 5.25 per cent and 5.5 per cent this week, maintaining projections for three cuts by year’s end.

While there was a slight increase in market expectations for US rate cuts, about 80 basis points are now priced in for this year, significantly lower than the 160 points anticipated at the beginning of the year.

The US dollar index rose for a second week, climbing by 0.5 per cent to reach 103.94.

In the commodities market, oil prices experienced a decline on Friday due to the potential for a Gaza ceasefire, which could alleviate geopolitical tensions in the Middle East. Additionally, a stronger dollar and weakening US gasoline demand contributed to the downward pressure on prices.

Brent crude futures dropped by 53 cents, or 0.6 per cent, to $85.25 a barrel by 0651 GMT, while US crude futures fell by 52 cents, or 0.6 per cent, to $80.55 per barrel.

Both contracts are expected to end the week with minimal fluctuations or slight declines, following a more than 3 per cent increase last week.