Pakistani Rupee Remains Stable Against US Dollar Amid Market Fluctuations

The Pakistani rupee has shown a slight decline against the US dollar, reflecting the ongoing fluctuations in the currency market. On Monday, the rupee depreciated by 0.04% in the inter-bank market, closing at 277.64. This represents a loss of Re0.12 against the greenback. Interestingly, just last week, the rupee had made a small recovery, gaining Re0.12 or 0.04% against the dollar, closing at 277.52. This back-and-forth movement highlights the current volatility in the currency exchange landscape.

According to the State Bank of Pakistan (SBP), the currency market is now perceived as relatively stable, particularly after the Executive Board approved a new bailout program with the International Monetary Fund (IMF). The approval has led to the receipt of the first tranche of funds, which is expected to bolster the rupee's position in the coming days.

On the international front, the US dollar has been on a rally, driven by strong job data released last Friday and rising tensions in the Middle East. The US jobs report indicated the largest increase in employment in six months for September, alongside a decrease in the unemployment rate and solid wage growth. These factors suggest a robust US economy, prompting markets to adjust their expectations regarding potential interest rate cuts by the Federal Reserve.

Market analysts now predict a 98% chance of a 25 basis point cut in November, a significant shift from the 47% probability just a week ago. This change in sentiment reflects the impact of the recent job data on market forecasts. The dollar index, which measures the dollar against major currencies, remained stable, having risen 0.5% on Friday to reach a seven-week high.

In terms of oil prices, which are crucial for currency parity, Brent crude has continued to rise, nearing $80 per barrel. This increase follows last week’s steepest jump since early 2023, driven by concerns over a potential escalation in the Middle East conflict and possible disruptions to oil exports from the region. Brent crude futures rose by $1.11, or 1.4%, to $79.16 a barrel, while US West Texas Intermediate crude futures increased by $1.28, or 1.7%, to $75.66.

In the open market, the Pakistani rupee experienced mixed results against other currencies. It lost 5 paise for buying and gained 15 paise for selling against the US dollar, closing at 278.30 and 279.69, respectively. Against the Euro, the rupee gained 1.71 rupees for buying and 1.69 rupees for selling, closing at 302.67 and 305.53, respectively. Meanwhile, against the UAE Dirham, the rupee lost 1 paisa for buying but remained unchanged for selling, closing at 75.37 and 76.08, respectively. Against the Saudi Riyal, the rupee gained 6 paise for buying and 5 paise for selling, closing at 73.56 and 74.23, respectively.

The fluctuations of the Pakistani rupee against the US dollar and other currencies reflect broader economic trends and geopolitical factors. As the situation evolves, it is essential for stakeholders, including businesses and consumers, to stay informed about these changes. Understanding the dynamics of currency exchange can help individuals and businesses make better financial decisions in an increasingly interconnected global economy.