The Pakistani rupee appreciated 0.15% against the US dollar during the first hours of trading on Tuesday.
At around 10 a.m., the rupee was trading at 286.20, up Re0.44 in the interbank market.
On Monday, the Pakistani rupee fell a bit against the US dollar, falling 0.07% to close at 286.64.
In a significant milestone, the State Bank of Pakistan (SBP) has decided to extend interbank settlement of card-based cross-border transactions for another five months.
Previously, on May 31, the SBP permitted banks to acquire the dollar from interbank for the purpose of settling card-based cross-border transactions with International Payment Schemes (IPSs).
The option was initially provided for two months and ended on July 31; however, the SBP has decided to prolong the validity of buying dollars from the interbank market for card payments for another five months.
Globally, the US dollar has gained ground against its major counterparts and Asian currencies.
According to data issued by the Federal Reserve on Monday, US banks reported tighter credit criteria and decreased loan demand from both businesses and consumers during the second quarter.
The Federal Reserve’s quarterly Senior Loan Officer Opinion Survey, or SLOOS, also revealed that banks anticipate tightening lending requirements further during 2023, adding to indications that higher interest rates are having an effect on the economy.
Tight lending criteria, according to CBA’s Clifton, can compound the effects of rising interest rates and contribute to a US recession later this year.
The dollar advanced 0.059% against a basket of currencies to 101.93, flirting with a new three-week high.
The index fell 1% in July.
Oil prices were little changed on Tuesday, trading near a three-month high achieved on Monday, on signs of tighter global supply as producers implement output cutbacks and robust demand in the world’s largest fuel user, the United States.