Pakistani rupee experienced a minor setback against the US dollar, depreciating by 0.01% in the inter-bank market on Monday.
Closing at 279.08 against the greenback, the local unit incurred a loss of Re0.04, according to the State Bank of Pakistan (SBP).
Throughout the previous week, the rupee witnessed marginal growth for the second successive week, with an increase of Re0.15 or 0.05% against the US dollar in the inter-bank market.
Despite initial losses in the week’s first three sessions, the currency rebounded in the final two, concluding the week at 279.04 against the greenback, compared to the previous week’s closure at 279.19, as reported by the SBP.
A significant development during the preceding week saw Moody’s Investors Service (Moody’s) upgrading the outlook of Pakistan’s banking sector from ‘negative’ to ‘stable’, attributing it to the easing macro challenges and fiscal pressures.
On the global front, the yen saw strengthening against the dollar on Monday amidst indications of the Bank of Japan exiting negative interest rates at its upcoming policy meeting, while the Federal Reserve is anticipated to cut rates in June.
The dollar index, gauging the currency against the yen and other major rivals, remained close to a nearly two-month low. The greenback declined by 0.17% to 146.82 yen, nearing Friday’s five-week low of 146.48.
Meanwhile, the dollar index remained steady at 102.68, staying close to Friday’s low of 102.33, a level unseen since January 15.
Oil prices, a pivotal factor influencing currency parity, sustained last week’s losses on Monday amid concerns about sluggish demand in China. However, geopolitical tensions in the Middle East and Russia curbed the decline.
Brent futures dropped by 12 cents to $81.96 a barrel, while US West Texas Intermediate (WTI) decreased by 21 cents to $77.8. Both benchmarks observed declines last week, with Brent down by 1.8% and WTI by 2.5% due to bearish Chinese data indicating softer demand in the world’s leading crude importer.
