Winning streak: Pakistani rupee appreciates 0.04% in fourth consecutive session

In a resilient display, the Pakistani rupee continued its upward trajectory against the US dollar, marking gains for the fourth consecutive session in the interbank market on Monday. 

The State Bank of Pakistan (SBP) reported a noteworthy appreciation of 0.04 per cent, with the rupee settling at Rs281.28 after a rise of Re0.12.

This positive trend extends the rupee’s recent performance, as it achieved a 0.16 per cent appreciation during the preceding week, settling at Rs281.40 against the US dollar in the inter-bank market. 

Impressively, this marks the eighth consecutive week of the local currency advancing against the greenback.

The momentum driving the rupee’s strength can be attributed to the recent announcement of a staff-level agreement (SLA) between Pakistan and the International Monetary Fund (IMF). 

This agreement pertains to the first review of the $3 billion standby arrangement (SBA), reinforcing investor confidence in Pakistan’s economic stability.

A significant development contributing to this positive outlook is the notable increase in foreign exchange reserves held by the State Bank of Pakistan. 

According to SBP data from the previous week, the central bank’s reserves surged by $464 million on a weekly basis, reaching $8.2 billion as of December 29.

Internationally, the US dollar maintained stability on Monday, with investors eagerly awaiting a crucial US inflation report later in the week. This report is expected to provide clarity on the Federal Reserve’s monetary policy outlook. 

The greenback’s recent rally was supported by a rebound in US Treasury yields as traders adjusted their expectations regarding the pace and scale of potential Fed cuts this year. 

This cautious optimism globally has complemented Pakistan’s positive economic indicators, contributing to the sustained strength of the Pakistani rupee against the US dollar.