The Pakistani rupee experienced a slight decline against the US dollar on Monday, depreciating by 0.04% or Re0.10 in the inter-bank market. The rupee closed at 280.07 against the greenback, marking its first close above 280 after more than a year. The last time the rupee closed below 280 was in January 2024.
In the previous week, the rupee had continued its gradual decline, losing Re0.30 or 0.11% in the inter-bank market. The local currency closed at 279.97 on Monday, compared to 279.67 the previous week, as per the data from the State Bank of Pakistan (SBP).
Internationally, the US dollar started the week on a weaker note following significant losses in the prior week. These losses were attributed to concerns about a potentially weakening US labor market and increasing fears of a global trade war, which pushed investors toward safer assets like the yen and the Swiss franc.
Markets have been closely monitoring rising trade tensions worldwide, particularly after US President Donald Trump imposed tariffs on top trading partners, although he delayed some of these tariffs for a month due to growing concerns about a potential slowdown in the US economy. This uncertainty has led to a loss of investor confidence in the US economy, which had previously outperformed its peers.
As a result, currency futures markets saw a sharp reduction in long dollar positions, dropping to $15.3 billion from a high of $35.2 billion in late January. The US dollar index, which measures the dollar against six other major currencies, stood at 103.59 on Monday, close to a four-month low.
Last week, the US dollar fell over 3% against major rivals, marking its weakest weekly performance since November 2022, amid concerns over the impact of tariffs on the US economy. Additionally, in a Fox News interview, President Trump refrained from predicting whether the US might face a recession, further unsettling investors.
Oil prices, another key factor in currency valuations, fell on Monday due to concerns about the impact of US import tariffs on global economic growth and fuel demand. Brent crude was down by 6 cents to $70.30 a barrel, while US West Texas Intermediate crude dropped by 8 cents to $66.96 a barrel.
Inter-bank Market Rates for the Dollar on Monday:
- BID: Rs280.06
- OFFER: Rs280.26
Open-market Movement: In the open market, the Pakistani rupee lost 3 paise for buying and 2 paise for selling against the US dollar, closing at 279.28 for buying and 281.49 for selling.
Against the Euro, the rupee lost 50 paise for buying and 60 paise for selling, closing at 302.10 and 305.26, respectively.
Against the UAE Dirham, the rupee lost 1 paisa for buying, with no change in the selling price, closing at 76.12 for buying and 76.70 for selling.
Against the Saudi Riyal, the rupee lost 9 paise for buying, with no change in the selling price, closing at 74.49 for buying and 75.00 for selling.
Open-market Rates for the Dollar on Monday:
- BID: Rs279.28
- OFFER: Rs281.49
