Islamabad, October 17, 2023: In a significant shift in the currency market, the Pakistani rupee’s impressive 28-session winning streak against the US dollar has come to an end. The local currency experienced a depreciation of 0.07% in the inter-bank market, settling at 277.03.
The State Bank of Pakistan (SBP) reported that this depreciation came just a day after the rupee had appreciated by 0.29%, reaching a settlement of 276.83. This marked the end of an extraordinary run for the rupee, which had seen one of the longest appreciation streaks in recent times.
The surge in the Pakistani rupee was attributed to the concerted efforts by authorities to curb smuggling and enforce stringent controls on the Exchange Companies (ECs) sector. The central bank had taken rigorous actions, suspending the authorization of nine exchange companies due to serious violations in the past month.
Internationally, the US dollar had started the day on the back foot as investors closely watched developments in the Middle East and prepared for a series of speeches by central bank officials. The spotlight was firmly on Fed Chairman Jerome Powell, who was scheduled to speak during a busy week of addresses by regional bank heads. The dollar index, measuring the US currency against six rival currencies, had eased slightly to 106.20 after a 0.36% drop the previous day.
In the background, the oil market was also in focus, as it steadied after a recent slide. This drop in oil prices came amid hopes that the United States would ease sanctions on Venezuelan oil production. Additionally, efforts to prevent further escalation of the conflict between Israel and Hamas contributed to the stabilization of oil prices, which are a key indicator of currency parity.
The Pakistani rupee’s recent performance and the shifts in the US dollar have captured the attention of investors and financial analysts alike, making it a story worth monitoring in the coming days. The currency market remains dynamic, and its fluctuations can have far-reaching implications for the broader economic landscape.