In the early hours of Monday’s trade in the inter-bank market, the Pakistani rupee appreciated by 0.23% against the US dollar. In intraday trade, the rupee was quoted at 259.40 against the US dollar at roughly 10:20 a.m., up Re0.59.
In the previous week, the rupee increased by about 1.1% to close at 259.99 as news of a $700 million inflow from China encouraged optimism. The realization of export proceeds and a larger flow of remittances through legal channels have helped the rebound since the currency touched its all-time low of around 276 earlier in February.
Although the country’s foreign exchange reserves have slightly increased, they still only cover less than one month’s worth of imports, which highlights the urgency with which the government must restart the delayed International Monetary Fund (IMF) project.
A slew of positive U.S. economic data put the dollar on the front foot internationally on Monday, hovering close to a seven-week high as it confirmed the Federal Reserve will need to raise interest rates higher and for a longer period of time.
The dollar index, which compares the US dollar to six important rival currencies, was at 105.17, only a little below the seven-week high of 105.32 it reached on Friday following hotter-than-expected data. The index is on track to end a four-month losing streak with a 3% gain in February.
Oil prices, a key indicator of currency parity, inched lower in volatile trade on Monday, as a stronger dollar and fears of recession risks offset gains arising from Russia’s plans to deepen oil supply cuts.