Intra-day update: rupee continues to appreciate against US dollar

The Pakistani rupee maintained its momentum against the US dollar, gaining another 0.37% during the opening hours of trading in the inter-bank market on Friday. At 10:10am, the rupee was hovering at 291.70, an increase of Rs1.08, in the inter-bank market. On Thursday, the rupee had appreciated 0.38% to settle at 292.78. The rupee has maintained an upward trajectory in recent days after hitting a record low of 307.1 in the inter-bank market on September 5. In a related development, the central bank on Thursday announced an increase in financial incentives for banks, Microfinance Banks and ECs to bring more home remittances into the country. Under these incentives, the State Bank of Pakistan (SBP) has increased the performance-based cash incentive up to Rs3 per USD on 15% growth in home remittances during this fiscal year. Internationally, the US dollar stood near a six-month peak on the prospect of higher-for-longer US rates. While the Fed kept interest rates steady this week, it signalled the possibility of another hike this year, with rates to be kept significantly tighter through 2024 than previously expected. The US dollar rode Treasury yields higher and against a basket of currencies, the greenback gained 0.1% to 105.50, not far from the previous session’s six-month high of 105.74. Oil prices, a key indicator of currency parity, rose on Friday as concerns that a Russian ban on fuel exports could tighten global supply outweighed fears that further US interest rate hikes could dent demand, but they were still headed for their first weekly loss in four weeks. This is an intra-day update