Intra-day update: Rupee Continues to Strengthen Against US Dollar in Inter-Bank Trading

The Pakistani rupee continued to strengthen against the US dollar on Thursday, gaining 0.5% during the first hours of trade in the interbank market.

At 10:10 a.m., the rupee was trading at 297.33, up Rs1.49 in the interbank market.

The rupee gained 0.36% on Wednesday to close at 298.82.

Since the government declared a crackdown on hoarders and smugglers of local currency last week, the currency has been on a tear.

In a related development, the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) is expected to convene today to decide on the policy rate. The key interest rate is already at an all-time high of 22%.

Read More: https://economy.pk/pakistan-likely-to-increase-petrol-price-by-up-to-rs15-per-litre-from-september-16/

Globally, the US dollar remained below a three-month high against the euro on Thursday, as focus shifted to the European Central Bank's rate-setting meeting later in the day, after US inflation data failed to change expectations for a Federal Reserve pause next week.

The US consumer price index (CPI) rose 0.6% last month, the most since June 2022, according to the Labour Department on Wednesday.

However, core inflation, which the Fed is more concerned about because it excludes food and energy prices, was 4.3% year on year in August, up from 4.2% in July.

In the Asian morning, the US dollar index, which measures the currency against a basket of six developed-market peers, including the euro and yen, fell 0.1% to 104.63.

Oil prices, an essential indicator of currency parity, rose on Thursday as markets refocused on a tighter crude supply projection for the remainder of 2023, with demand expected to remain strong through next year.