The Pakistani rupee registered a decline of 0.55% against the US dollar during the opening hours of the trading session on Wednesday.
In intra-day trade, the rupee was down Rs. 1.46 at 262.96 against the US dollar at around 11:45 a.m.
On Tuesday, the rupee ended a four-session winning streak against the US dollar, finishing at 261.5 after losing 0.60% in the inter-bank market.
In a significant development, the Ministry of Finance stated that it expects inflation to remain high in the upcoming months, at around 28% to 30%, as a result of the uncertain economic and political environment, currency depreciation, the recent increase in energy prices, and the increase in administered prices.
Although the State Bank of Pakistan (SBP) has been executing a contractionary monetary policy, it would take some time for inflationary expectations to stabilize, according to the monthly economic update and outlook for the month of February provided on Tuesday by the Ministry of Finance.
When China’s manufacturing activity increased faster than expected and at its quickest rate since April 2012, the dollar shook globally on Wednesday, encouraging some risk-taking and a decline in the safe-haven currency.
The US dollar decreased on a global level on Wednesday as markets cheered the recovery of activity in the second-largest economy in the world following China’s departure from its strict COVID regulations late last year.
The US dollar index decreased 0.07% to 104.91 when measured against a basket of currencies.
Oil prices, a key indicator of currency parity, extended gains for a second session on Wednesday after a substantial jump in manufacturing in China, the world’s top crude importer, boosted the outlook for global fuel demand.
