During the opening hours in the inter-bank market on Friday, the Pakistani rupee showcased a marginal gain of 0.15% against the US dollar, reaching 281.25 at 10:15 am—an increase of Re0.42. This follows the previous day’s marginal gains when the rupee settled at 281.67 against the US dollar.
A significant development unfolded as the State Bank of Pakistan (SBP) recorded an impressive $1.3 billion increase in foreign exchange reserves over a two-week period. This boost was attributed to official inflows from international financial institutions, including the government of Pakistan. Notably, the SBP’s foreign exchange reserves experienced an upward momentum with inflows of $852 million in the week ending December 22, 2023, and an additional $464 million by December 29, 2023. The cumulative inflow during these two weeks totaled $1.316 billion, originating from entities such as the World Bank and the Asian Development Bank. Analysts attribute this surge to multilateral dollar inflows following IMF staff approval, resulting in Pakistan’s FX reserves reaching a 23-week high.
Internationally, the US dollar displayed stability on Friday, poised for its most robust weekly performance since July, reflecting reduced expectations of imminent interest rate cuts. This trend comes ahead of the eagerly awaited US payrolls data. Despite positive data indicating stronger-than-expected private employment in December, economists predict a lower job creation figure compared to November.
Oil prices, influential in currency parity, experienced a slight uptick on Friday. The Federal Reserve’s indication of controlled inflation and US Secretary of State Antony Blinken’s visit to the Middle East, aimed at preventing escalation in the Israel-Gaza conflict, contributed to this rise. Brent crude futures increased by 0.5% to $77.96 a barrel, while US West Texas Intermediate crude futures rose by 0.7% to $72.69.
