The Pakistani rupee made further improvement against the US dollar, appreciating 0.09% in the inter-bank market on Thursday.
At 10:30am, the currency was hovering at 277.78, a gain of Re0.26 against the US dollar.
On Wednesday, the rupee had settled at 278.04, according to the State Bank of Pakistan (SBP).
The currency market is now factoring in the International Monetary Fund (IMF) Executive Board meeting that is scheduled to take Pakistan’s 37-month Extended Fund Facility (EFF) of about $7 billion on its agenda on September 25.
Internationally, the US dollar rose broadly on Thursday, recovering from an earlier tumble in the immediate aftermath of the Federal Reserve’s outsized interest rate cut that had been largely priced in by markets.
The US central bank on Wednesday kicked off its monetary easing cycle with a larger-than-usual half-percentage-point reduction that Chair Jerome Powell said was meant to show policymakers’ commitment to sustaining a low unemployment rate now that inflation has eased.
While the size of the move had been anticipated by investors in part due to a slew of media reports pointing in that direction ahead of the decision, it defied the expectations of economists polled by Reuters, who were leaning toward a 25-basis-point cut.
Still, markets reacted in a typical “buy the rumour, sell the fact” fashion that kept the dollar on the front foot in early Asian trade. It rebounded from a more than one-year low against a basket of currencies in the previous session and was last marginally higher at 101.03.
Fed policymakers on Wednesday projected the benchmark interest rate would fall by another half of a percentage point by the end of this year, a full percentage point next year and half of a percentage point in 2026, though they said the outlook that far into the future is necessarily uncertain.
Oil prices, a key indicator of currency parity, fell in Asian trading on Thursday after a larger-than-expected Federal Reserve interest rate cut sparked concerns about the US economy.
Brent crude futures for November fell 34 cents, or 0.46%, to $73.31 a barrel by 0015 GMT, while WTI crude futures for October declined to $70.49 a barrel, down 42 cents or 0.59%.
This is an intra-day update
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