The Pakistani rupee (PKR) made a substantial comeback against the US dollar during Friday’s early trading hours, rising by 4.51 percent. By 11:50 a.m., the PKR was quoted on the interbank exchange at Rs272.78 against the US dollar, an increase of Rs12.31.
This comes after the rupee plunged sharply by 6.66 percent, or almost Rs19, on Thursday, reaching an all-time low of Rs285.09 against the US dollar.
In an effort to control inflation, the Monetary Policy Committee (MPC) of the State Bank of Pakistan increased the main policy rate by 300 basis points (bps) to 20% on Thursday.
The committee also stressed the importance of taking action to reduce energy consumption in order to meet import demands and relieve pressure on the external account. The MPC anticipates that this choice will stabilise inflation expectations and help it reach a medium-term goal of 5% to 7% by the end of FY25.
Globally, the US dollar weakened towards its first weekly loss since January against key peers after reaching a 2-1/2-month high against the yen on Friday. Traders were trying to predict the direction of Federal Reserve policy when this happened.
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While oil prices, a key indicator of currency parity, fell on Friday, they are still expected to rise for the week as renewed hope for China’s demand rebound outweighs worries about rising crude inventories in the US and tighter monetary policy in Europe.