Intra-Day Update: Rupee Continues to Weaken Against US Dollar

The Pakistani rupee fell further against the US dollar on Tuesday, losing 0.35% of its value.

At 12:10pm, the rupee was trading at 288.92, down Re1 on the inter-bank market.

The rupee fell against the US dollar for the seventh consecutive session on Monday, falling 0.39% to close at 287.92 in the interbank market.

In a significant development, the National Electric Power Regulatory Authority (NEPRA) on Monday approved an increase in basic electricity tariff by Rs7.5 per unit across the country beginning July 1, 2023, with the chairman stating that it is an election year and political decisions are being made to pass a lower burden on 68% protected consumers.

Internationally, the US dollar climbed ahead of this week’s trio of key central bank meetings, while the euro fell to a two-week low on Tuesday as a deteriorating slowdown in eurozone business clouded the bloc’s rate outlook in the face of a still-hawkish European Central Bank (ECB).

Markets have fully priced in a 25-basis-point rate hike by the ECB at its meeting this week, but the path of future rate hikes beyond July is uncertain.

The Federal Reserve will also meet this week and is likely to raise interest rates by 25 basis points, with the majority of economists polled by Reuters anticipating this to be the final increase in the central bank’s current tightening cycle.

Oil prices, a key indicator of currency parity, edged higher for the third straight session on Tuesday, as signs of tighter supplies and pledges by Chinese authorities to shore up the world’s second-biggest economy lifted sentiment.

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