The Pakistani rupee maintained its momentum against the US dollar, appreciating another 0.6% during trading in the inter-bank market. Rupee continued its appreciation run against the US dollar in the open market as well on Monday.
At 2:15pm, the rupee was hovering at 301.10, an increase of Rs1.85, in the inter-bank market.
During the previous week, the rupee appreciated 0.83% to settle at 302.95 against the US dollar in the inter-bank market, but there was much more to the story as its gap with the open market reduced massively while a reported crackdown on smuggling and speculation saw the currency reverse fortune after it hit a record low last Tuesday.
The move by the State Bank of Pakistan (SBP) to strengthen controls on Exchange Companies, and reports of the army chief’s intervention and deployment of law-enforcement personnel at currency dealer outlets saw the currency regain ground.
Internationally, the US dollar was on the back foot ahead of this week’s US inflation reading.
US inflation data for the month of August is due on Wednesday, with traders on the lookout for whether the world’s largest economy is indeed on track for a “soft landing”, and whether the Fed has further to go in raising rates.
The dollar, along with US Treasury yields, had surged last week after a run of resilient economic data added to bets that further rate hikes from the Fed may be on the horizon.
The dollar index, which capped last week with eight straight weeks of gains, its longest run since 2014, dipped slightly to 104.84.