During the early hours of trading in the inter-bank market on Monday, the Pakistani rupee suffered a marginal loss against the US dollar, falling by 0.14%.
The rupee was quoted at 284.20 at around 10:20 am, marking a decline of Re0.41 against the US dollar in the inter-bank market. Last week, the rupee depreciated slightly by 0.21% to settle at 283.79, despite slightly higher foreign exchange reserves that kept the downside pressure at bay, even without the resumption of the International Monetary Fund (IMF) programme.
Although the reserves held by the State Bank of Pakistan (SBP) were below one month of import cover, the IMF programme needs to be resumed. As experts believe, the rupee will continue to remain under pressure as a reduction in oil production may drive up the price of the commodity, thereby affecting the current account of countries like Pakistan.
Globally, the US dollar started the week on a higher note, as concerns over inflation resurfaced after a surprise announcement by major oil producers to cut production further, resulting in traders betting that the Federal Reserve may need to increase interest rates at its next meeting.
The dollar index, which measures the US dollar against six peers, was last at 102.77, aiming to break through 103 for the first time in a week. Additionally, oil prices, a crucial factor in currency parity, rose on Monday after Saudi Arabia and other OPEC+ producers announced an unexpected round of output cuts. This move could be an ominous sign for global inflation, just days after a slowdown in US price data had boosted market optimism. The change occurred before a virtual meeting of an OPEC+ ministerial panel, which includes Saudi Arabia and Russia.
