KARACHI: The Pakistani rupee closed weaker against the US dollar in both currency markets on Thursday. The rupee closed at 277.84 per dollar in the interbank market, slightly lower than Wednesday’s close of 277.72.
The local currency likewise declined in value in the open market, falling from 278.67 to 278.79 versus the dollar. The rupee experienced marginal depreciation, as importer demand surpassed exporters' dollar sales, according to dealers.
“We expect the rupee to stay trade range-bound in the coming sessions. However, the rupee's future outlook will be determined by the upcoming monetary policy announcement by the State Bank of Pakistan on November 4,” a currency dealer said.
“Market participants are anticipating an aggressive rate cut in the upcoming monetary policy, with expectations ranging from a 200 to 400 basis point cut,” said Chase Securities in a note.“Sukuks and PIBs are currently trading at yields of 12-13 per cent, while the policy rate stands at 17.5 per cent, suggesting that the market is pricing in a medium-term rate cut of around 400-500 basis points,” it said.The SBP cut the policy rate by 350bps in July and September 2024, taking the cumulative reduction to 450bps since June 2024 amid a significant decline in inflation.
