As investors await the US Federal Reserve’s decision on the policy rate, the Pakistani rupee (PKR) depreciated by 0.35 per cent against the greenback on Wednesday.
According to the State Bank of Pakistan (SBP), the local unit appreciated by Rs0.78 and ended the day at Rs221.43.
The Pakistani rupee enjoyed gains against the US dollar on Tuesday, and it ended the day at Rs220.65 after rising by Rs0.24 (or 0.11 per cent) in the interbank market.
Gains were recorded when market confidence improved as a result of discussions held by Finance Minister Ishaq Dar with senior bank and exchange company executives.
However, in a significant development, according to the most recent data released by the Pakistan Bureau of Statistics (PBS) on Tuesday, consumer price index (CPI)-based inflation increased to 26.6 per cent on an annual basis in October 2022 as opposed to an increase of 23.2 per cent in the previous month and 9.2 per cent in October 2021.
Globally, the US dollar slipped on Wednesday as investors awaited the US Federal Reserve’s policy decision amid speculation it might indicate a slowdown in future rate hikes. The central bank will soon release its policy statement with investors widely expecting a 75 basis points (bps) rate hike, the fourth such increase in a row.
The dollar index – which gauges the greenback against a basket of six counterparts that includes the yen, euro and sterling – eased 0.2 per cent to 111.28, but was not far below Tuesday’s high of 111.78, the strongest level since October 25. The index has fluctuated widely around the 112 level since its retreat from a two-decade high of 114.78 at the end of September.
Oil prices, a crucial gauge of currency parity, increased on Wednesday after data from the sector revealed a surprising decline in US oil supplies, indicating that demand is still strong despite sharp interest rate increases that are slowing down global development.
