During the first hours of trading on Tuesday, the Pakistani rupee depreciated by just under 0.1% against the US dollar.
The rupee was down Re0.24 against the US dollar in the inter-bank market at 10:40 am, quoted at 281.85.
The rupee started off this week poorly after marginally strengthening on Friday last week, falling Re0.84 or 0.3% to settle at 281.61 against the dollar in the interbank market.
The development comes as the market eagerly anticipates the restart of the Extended Fund Facility (EFF) program of the International Monetary Fund (IMF), which is essential for the cash-strapped Pakistani economy.
A significant development was the discovery that the government apparently opted to look to the US for assistance in negotiating an agreement at the staff level with the IMF.
Ishaq Dar, the finance minister, will get in touch with Ambassador Donald Blome to ask for the Biden administration’s assistance in negotiating an agreement at the staff level with the IMF.
Internationally meantime, the US dollar remained close to a multi-week low on Tuesday as traders speculated that the Federal Reserve would suspend its aggressive rate-hiking cycle due to concerns of a bigger systemic crisis following the bankruptcy of a US tech-focused lender. In the wake of the abrupt failure of Silicon Valley Bank (SVB) and Signature Bank, market anxieties persisted for a second consecutive trading day, despite US President Joseph Biden’s pledge on Monday to take steps to protect the security of the US banking system.
The US dollar index increased 0.09% to 103.77 when measured against a basket of currencies, after falling 0.9% on Monday to a one-month low of 103.47.
Oil prices, a key indicator of currency parity, fell more than $1 on Tuesday, extending the previous day’s slide, as the collapse of Silicon Valley Bank rattled equities markets and sparked fear about a fresh financial crisis.