On Monday, the Pakistani rupee posted marginal gains against the US dollar, gaining nearly 0.15% in mid-morning trade on the interbank market.
Around 10:30 am, the rupee was quoted at 288, an improvement of Re0.43, This comes a day after the rupee fell to a new all-time low against the US dollar to settle at 288.43 in the interbank market after losing Rs 1.34 or 0.46%.
Market experts attributed the decline to insufficient progress in resuming an International Monetary Fund (IMF) program that has remained on hold since last year.
In its latest World Economic Outlook (WEO), the IMF has revised its GDP growth projection for Pakistan downwards from 2% to 0.5% for the current fiscal year, i.e. 2023 is the key development. The fund projected inflation to rise from 19.9% to 27.1% and unemployment from 6.2% to 7%.
The U.S. dollar fell on Wednesday ahead of closely watched inflation data later in the day that will lead to a rate hike by the Federal Reserve.
After last week’s solid US employment data, all eyes are now on the inflation report, with currency moves muted ahead of the release.
The U.S. dollar index against a basket of currencies fell 0.05% to 102.07.
Oil prices, a key indicator of currency parity, were mostly flat on Wednesday as the market awaited US inflation data later in the day, which is likely to influence the Federal Reserve’s policy on future interest rate hikes.