Intra-day update: rupee slightly stronger against US dollar

The Pakistani rupee gained 0.04% against the US dollar during the first hours of trade in the interbank market on Wednesday.

At roughly 10:40 a.m., the rupee was trading at 284.86 rupees, or Re0.10 higher.

The rise comes after the rupee remained mostly steady versus the US dollar on Tuesday, closing at 284.96 in the inter-bank market.

Meanwhile, it has been reported that Pakistan will pay Saudi Arabia a 4% annual return on deposits of $2 billion with the State Bank of Pakistan (SBP) for a period of one year, according to well-informed sources.

According to sources, Saudi Arabia agreed to deposit $2 billion to meet one of the International Monetary Fund (IMF) preconditions, in which Pakistan was required to secure foreign funding of up to $6 billion.

Separately, Pakistan achieved a current account surplus in April 2023 for the second consecutive month, owing primarily to a decreased import bill.

The SBP said on Tuesday that the country had a current account surplus of $18 million for the month of April 23, compared to a deficit of $640 million for the month of April 22. The current account was in surplus for the second month in a row; nevertheless, the surplus in April was less than the surplus in March, which was $750 million.

Internationally, the US dollar was robust on Wednesday, bolstered by a safety bid as the US approached its borrowing limit and lifted by solid economic data that had traders reducing bets on imminent rate cuts.

The dollar reached a two-week high of 136.69 yen overnight and was trading just below that level at 136.35 early in Asia. It also surpassed its 50-day moving average versus the euro, closing at $1.0866 per euro.

Oil prices, a crucial predictor of currency parity, were little changed on Wednesday as traders remained cautious following a surprising jump in US oil stocks, which fueled demand fears following weaker-than-expected economic data from the US and China.

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