US dollar slips to Rs 294.50

ISLAMABAD: The Pakistani rupee continued to appreciate against the US dollar, gaining another 0.49 percent during the opening hours of trading in the inter-bank market on Tuesday.

At midday, the rupee was hovering at 294.50, an increase of Rs1.45, in the inter-bank market.

However after staying stable on the opening day of the week, the Pakistani rupee weakened against the US dollar in the open market on Tuesday.

Forex dealers said the rupee was quoted at 300 for selling and 297 for buying purposes for customers in the open market, lower by Rs3 as compared to rates on Monday.

Despite the fall, rates are close to the rupee’s value in the inter-bank market, reducing the premium that is one of the structural benchmarks of the International Monetary Fund (IMF) programme.

The government was asked that the average premium between the inter-bank and open market rate will be no more than 1.25% during any consecutive 5 business day period.

On Monday, the rupee had appreciated 0.3percent to settle at 295.95 in interbank.

PSX midday update

The rupee has been on a merry run in recent days, strengthening after it hit a record low of 307.1 in the inter-bank market. The change in fortune comes as authorities introduced reforms in the Exchange Companies’ (ECs) sector and reportedly also cracked down on smuggling, lending support to the currency markets.

The development slightly improves the outlook that had come under pressure over the ease in import restrictions that caused the current account deficit to widen in July.

Globally, the US dollar edged broadly lower, though strayed not too far from a six-month peak hit against its major peers last week ahead of the Fed’s interest rate decision on Wednesday.

Oil prices, a key indicator of currency parity, rose on Tuesday for the fourth consecutive session, as weak shale output in the US spurred further concerns about a supply deficit stemming from extended production cuts by Saudi Arabia and Russia.