Rupee posts 11th straight gain against US dollar
The Pakistani rupee registered its 11th consecutive appreciation on Friday, closing slightly stronger against the US dollar in the inter-bank market.
According to the State Bank of Pakistan, the rupee ended the session at 281.90, marking a gain of Re0.2 or 0.01% against the greenback compared with Thursday’s close of 281.92. The streak of marginal improvements highlights a phase of stability for the local currency, which has benefitted in recent weeks from controlled import demand, improved foreign exchange reserves, and steady inflows.
In global markets, the US dollar held firm on Friday, poised for its strongest weekly performance in a month, as investors awaited remarks from Federal Reserve Chair Jerome Powell at the annual Jackson Hole symposium in Wyoming. Powell’s comments are expected to guide expectations on whether the US central bank will proceed with an interest rate cut at its September meeting.
Earlier in August, an unexpectedly weak jobs report for July, alongside downward revisions to hiring figures for May and June, had boosted hopes of aggressive monetary easing. Traders initially priced in the possibility of a large rate cut. However, cautious remarks from other Fed officials and subsequent data pointing to inflationary risks have moderated those expectations. According to the CME FedWatch tool, markets are now pricing in a 75% probability of a 25-basis-point cut in September, down from 92% a week earlier.
Rupee Inches Higher Against US Dollar
The dollar index, which tracks the greenback against a basket of six major currencies, was steady at 98.61, set for a 0.7% weekly rise that would break a two-week losing streak. The euro was trading at \$1.1613, down 0.8% for the week, while the British pound stood at \$1.3416, nearly 1% lower.
Commodity markets offered little volatility, with oil prices slipping slightly after gains in the previous session. Brent crude futures fell by 17 cents, or 0.25%, to \$67.50 a barrel by mid-morning GMT, while West Texas Intermediate (WTI) edged down 13 cents, or 0.2%, to \$63.39. Both benchmarks, however, were on track to post weekly gains—Brent up 2.8% and WTI up 1%—marking their first positive week in three. Traders said hopes of an imminent peace deal between Russia and Ukraine had faded, keeping oil prices supported despite modest declines in the day’s session.
For Pakistan, oil price trends remain a critical factor for the rupee, given the country’s reliance on fuel imports and the pressure global energy costs exert on the trade balance. Analysts note that the local unit’s continued stability could hinge on whether international crude prices remain contained and whether remittance and export inflows can sustain the current momentum.
While the rupee’s gains have so far been incremental, the streak reflects a broader effort by monetary authorities to anchor expectations and limit volatility in the foreign exchange market. Economists caution that the sustainability of the appreciation will depend on external developments, including the Federal Reserve’s policy stance, oil market dynamics, and Pakistan’s own balance-of-payments outlook.
The rupee’s eleventh straight gain provides some respite for importers and debt managers, but markets remain closely tied to global macroeconomic shifts. The weeks ahead will determine whether the local currency can extend its stability or face renewed pressure as global monetary and commodity markets evolve.
