The Pakistani rupee continued to strengthen against the US dollar on Tuesday, gaining 0.46% during interbank trading.
At 12 p.m., the rupee was trading at 294.60, up Rs1.35 in the interbank market.
The rupee gained 0.3% on Monday, closing at 295.95.
The rupee has been on a roll in recent days, recovering from a record low of 307.1 in the interbank market. The improvement comes after authorities implemented reforms in the Exchange Companies (ECs) sector and purportedly cracked down on smuggling, providing assistance to currency markets.
The result marginally improves the outlook, which had been impacted by the relaxation of import restrictions, which caused the current account deficit to worsen in July.
“We expect PKR/USD in the inter-bank market to be in the range of Rs320-340 by June 2024,” Topline Securities recently stated in a study.
Globally, the US dollar fell broadly, but it remained close to a six-month high against its major counterparts achieved last week ahead of the Fed’s interest rate decision on Wednesday.
The US dollar index fell 0.04% to 105.04. According to the CME FedWatch tool, money markets expect the Fed to keep rates on hold at its forthcoming meeting, but the attention will be on the central bank’s forward guidance.
“The market is fully pricing in a hold, and this meeting was always likely to be a pass since the Fed skipped June, effectively moving to an every-other-meeting cadence,” Erik Weisman, chief economist and portfolio manager at MFS Investment Management, said.
Oil prices, a major measure of currency parity, increased for the fourth consecutive session on Tuesday, since low oil output in the United States sparked fresh fears about a supply gap caused by Saudi Arabia and Russia’s protracted production curbs.
