The Pakistani rupee continued its upward trend against the US dollar, marking the 11th consecutive session of appreciation in the interbank market on Wednesday.
According to the State Bank of Pakistan (SBP), the rupee closed at 293.88, reflecting a 0.35 per cent increase. This follows a 0.36 per cent appreciation on Tuesday, when it settled at 294.90.
Recent days have seen a remarkable strengthening of the rupee, with a nearly 4.5 per cent gain since hitting a record low of 307.1 in the inter-bank market on September 5.
This turnaround is attributed to structural reforms introduced by the State Bank of Pakistan (SBP) in the Exchange Companies’ (ECs) sector and reported efforts to combat smuggling, both of which have provided support to the currency markets.
Globally, the US dollar remained steady on Wednesday, with a slight softening against the yen, in anticipation of the Federal Reserve’s highly anticipated rate decision later in the day.
The US dollar index, which gauges the greenback against a basket of currencies, held steady at 105.13 as traders awaited the Fed’s announcement. Market expectations are that the Fed will likely maintain interest rates in the range of 5.25 per cent to 5.50 per cent, putting the spotlight on the central bank’s forward guidance.
Meanwhile, oil prices, a significant indicator of currency stability, declined by nearly $1 on Wednesday, ahead of the US Federal Reserve’s interest rate decision. Investors remain uncertain about when peak interest rates will be reached and the potential impact on energy demand.
These price drops occurred despite larger-than-expected reductions in US oil stockpiles and weaker US shale output, both of which point to limited crude supply for the remainder of 2023.