KARACHI: The rupee recorded marginal gains against the US dollar in the interbank market on Friday, but weakened slightly in the open market.
The rupee ended at 278.33 to the dollar, compared with Thursday’s close of 278.4 in the interbank market.According to dealers, the rupee saw a small uptick for the second session in a row due to normal importer dollar demand. Investors opted to remain on the sidelines ahead of the monetary policy meeting on Monday, which resulted in the currency trading in narrow bands.
In the open market, however, the local currency dropped and ended at 279.82 per dollar, down from 279.7 in the previous trading session.According to JP Morgan’s most recent report, stronger external stability brought about by the International Monetary Fund’s new loan programme eliminates a major barrier to the State Bank of Pakistan’s decision to resume policy easing.
In view of the counteracting effects from a declining domestic demand, rate-based taxation policies (such as higher sales and excise taxes) and periodic adjustments to energy prices should not have a significant impact on the disinflation trend.
“There is substantial room for easing. As such, we expect the SBP to deliver at least 500-600 bps of rate cuts in FY25, with potentially a front-loaded easing profile in 1HFY25 while external conditions remain benign,” it said.