Rupee edges up to 277.12 as IMF mission begins review meetings
The Pakistani rupee extended a marginal gain against the US dollar on Tuesday, appreciating 0.01% in the interbank market to close at 277.12, a rise of Re0.03, after settling at 277.15 on Monday. The move came as Finance Minister Muhammad Aurangzeb held a kick-off meeting with an International Monetary Fund mission in Islamabad, according to a statement from the Ministry of Finance. The mission is in the country for the fourth review of Pakistan's Extended Fund Facility arrangement and the third review of the Resilience and Sustainability Facility, the ministry said.
In the open market, the rupee gained 12 paise for buying and 8 paise for selling against the dollar, closing at 278.05 and 279.15. It rose 76 paise for buying and 71 paise for selling against the euro, to 315.51 and 318.65. Against the UAE dirham the rupee was unchanged for buying and gained 2 paise for selling, at 75.70 and 76.28, while against the Saudi riyal it added 1 paisa for buying and 2 paise for selling, closing at 74.02 and 74.52.
Internationally, the dollar hovered near a two-month high, supported by volatile oil prices and a rapid climb in Treasury yields, though gains were limited as traders awaited US data this week for clues on the Federal Reserve's rate path. The dollar index was a touch higher at 101.2 and on track for a 1.8% advance this month, its best performance since June. The euro traded near its weakest level in three months at $1.1367 after the European Central Bank's chief signalled measured steps to quell inflation, while sterling was steady at $1.3248, also not far from a three-month trough.
A deepening selloff in US Treasuries pushed yields to new peaks, with the 10-year benchmark at its highest since 2007 and the 30-year at its highest since 2004. The monetary policy-sensitive two-year yield rose to its highest in more than two years, closing in on 5%. Data releases later this week, including the PCE price index on Wednesday and nonfarm payrolls on Friday, are both expected to support the case for further Fed rate hikes. Markets now see a more than 70% chance of a rate increase at the end of October, up from 57% a week ago, according to CME Group's FedWatch tool.
Oil prices, a key indicator of currency parity, declined as investors focused on signs of recovering crude exports from the Middle East and lingering concerns over potential supply disruptions in the region. Brent crude futures were down $1.96, or 1.86%, at $103.32 a barrel at 1306 GMT, while US West Texas Intermediate was at $90.65, down $1.95, or 2.11%.
