The rupee continued to inch upward against the US dollar for the sixth successive session, appreciating 0.04% in the inter-bank market on Wednesday.
As per the State Bank of Pakistan (SBP), the rupee closed at 279.67 after a gain of Re0.12 against the greenback.
On Tuesday, the rupee registered a gain as well as it settled at 279.79 against the US dollar, according to the SBP.
In a key development, the State Bank of Pakistan (SBP) decided to revamp the foreign exchange trading system and announced to introduce a Centralized Foreign Exchange (FX) Trading Platform called “FX Matching” for the interbank FX market to bring more transparency to the interbank market.
Effective January 29, 2024, it will be mandatory for ADs to use ‘FX Matching’ or FXT dealing for executing outright interbank FX transactions.
Analysts said this centralized trading platform will reduce the volatility in the interbank market and support a free and fair FX trading system.
Moreover, the meeting of the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) will be held on Monday i.e. January 29 to decide about the policy rate.
Internationally, the US dollar hovered near a six-week high against major peers on Wednesday as investors cemented expectations that the Federal Reserve would be in no rush to cut interest rates in the face of a resilient US economy.
The Japanese yen, though, ticked higher as expectations rose for a stimulus exit as soon as March, following hawkish comments from the Bank of Japan on Tuesday.
The US dollar index – which tracks the currency against six rivals, including the euro and yen – was flat at 103.48 after rising to the highest since Dec. 13 at 103.82 in the previous session.
The US rate futures market on Tuesday priced in a roughly 47% chance of a March rate cut, up from late on Monday, but down from as much 80% about two weeks ago, according to LSEG’s rate probability app.