The Pakistani rupee witnessed a slight increase of 0.13% against the US dollar during the opening hours of trading in the inter-bank market on Thursday. At 11:05 am, the rupee stood at 282.53, marking a gain of Re0.37.
In a significant development, the government achieved a historic milestone by raising Rs397 billion ($1.4 billion) in Wednesday’s local currency bond auction. This unprecedented borrowing in a single auction surpassed expectations, reflecting market interest even as December comes to a close.
Investors’ substantial participation underscores their confidence in long-term bonds, driven by the anticipation of an early 2024 rate cut. The government strategically opted for long-term borrowing, effectively minimizing rollover risks and reducing reliance on short-term funding in the future.
Globally, the US dollar found support on Thursday following a sudden end to a robust rally for US stocks, leading investors to seek safety. Heavy selling in the final hour of equities trade on Wall Street triggered a ripple of risk aversion, lifting the under-pressure greenback from lows.
Currency markets are now focused on Friday’s release of the US core personal consumption expenditure (PCE) index. Analysts forecast a 0.2% rise in November, with the annual inflation rate slowing to its lowest since 2021 at 3.3%. Analysts suspect a downside risk, anticipating the Fed’s need to ease policy to prevent real rates from rising.
The dollar index, down 1% for the year, remained steady at 102.37 in early Asia trade on Thursday.
In the oil market, prices fell as concerns over low demand following a surprise US crude inventory build outweighed global trade disruption fears due to tensions in the Middle East. Brent crude futures declined by 0.3% to $79.48 a barrel, and US West Texas Intermediate crude was at $74 a barrel, down 0.3%.
