The Pakistani rupee registered marginal improvement against the US dollar, appreciating 0.05% during the opening hours of trading in the inter-bank market on Monday.
At 10:20am, the rupee was hovering at 279.77, an increase of Re0.13, in the inter-bank market.
In a key development, the caretaker government committed to the International Monetary Fund (IMF) that it would build reserves as conditions permit and let the rupee find its market value as imports are normalised even if pressures re-emerge.
Pakistan in a letter of Intent (LoI), signed and submitted by the caretaker finance minister and governor State Bank of Pakistan to MD IMF, stated that it has initiated structural reforms in the exchange companies sector that will enhance governance and transparency.
In the period ahead, the government will seek to build on the strong programme performance to gradually widen the path to macroeconomic sustainability and lay the conditions for sustained and balanced growth.
During the previous week, the rupee appreciated Re0.46 or 0.16% to settle at 279.9 against the US dollar in the inter-bank market.
It was the tenth consecutive week the local currency gained against the greenback, a momentum on the back of announcement of a staff-level agreement (SLA) between Pakistan and the IMF on the first review of the $3 billion Stand-by Arrangement (SBA), which led to the approval of the second tranche of the package.
Globally, the US dollar struggled to keep gains in early Asian trade on Monday.
The dollar’s trade-weighted index was down 0.07% at 103.19 and flat against the euro at $1.0898.
Its rally so far this year has been tentative and fickle as investors try to make up their minds about when the Federal Reserve will start cutting rates.
Data late last week showing US economic activity remains resilient despite interest rates at their highest level in decades caused markets to scale back expectations of rate cuts beginning as soon as in March.
Oil prices, a key indicator of currency parity, fell for a second day on Monday as economic headwinds pressured the global oil demand outlook and outweighed geopolitical concerns in the Middle East and an attack on a Russian fuel export terminal over the weekend.