KARACHI: The rupee continued its upward trajectory in the interbank market for the third straight session on Thursday.
The rupee finished at 278.44 to the US dollar, up from its previous close of 278.54.Dealers said that the improved dollar availability in the market was why the local unit kept rising. The rupee remained unchanged in the open market and traded at 280.85 per dollar for the second day in a row.
The State Bank of Pakistan cut its key interest rate by 200 basis points to 17.5 per cent, the third straight reduction since June as inflation cools. August’s single-digit inflation number indicated the potential for a significant rate reduction. Nevertheless, considering the continuous threats to the external account and the lack of an active International Monetary Fund programme, the SBP took a cautious approach.
Analysts said that political and economic uncertainties have led market players to take a ‘wait and see’ stance as they keep an eye on developments related to the IMF programme.Pakistan is facing difficulties in obtaining approval from the International Monetary Fund’s executive board for a $7 billion loan programme. There are concerns that if the approval is further delayed, it could pose a significant risk for repaying maturing external debt, which may strain the country’s foreign exchange reserves in the long run.