Intraday Update: Rupee Continues to strengthen Against the US Dollar

The Pakistani rupee kept on rising against the US dollar on Thursday, gaining 0.40% during the first hours of trade in the interbank market.

At 11:10 a.m., the rupee was trading at 292.70, up Rs1.18 in the interbank market.

The rupee gained 0.35% on Wednesday, closing at 293.88.

After touching a record low of 307.1 in the inter-bank market on September 5, the rupee has been on a tear in recent days.

The improvement comes after the State Bank of Pakistan (SBP) implemented structural changes in the Exchange Companies (ECs) sector, as well as administrative steps implemented by the authorities to combat currency smuggling and hoarding.

Globally, the US dollar rose to its highest level against the yen since November, following the US Federal Reserve’s hawkish pause.

At its monetary policy meeting on Wednesday, the Fed met market expectations by keeping interest rates unchanged in the 5.25%-5.50% range.

The US Federal Reserve, on the other hand, hardened its aggressive monetary policy position, which its officials increasingly feel may succeed in decreasing inflation without destroying the economy or causing substantial job losses.

The dollar index, which measures the currency against a basket of competitors, reached 105.59 on Thursday, its highest level since March 9. Last week, the index rose for the ninth week in a row, its longest winning streak in nearly a decade, as solid US GDP spurred a dollar resurgence.

Oil prices, a major indicator of currency parity, dipped in early Asian trade on Thursday, following the biggest drop in a month in the previous session, as anticipation for US interest rate hikes outweighed the impact of US crude stockpile drawdowns.

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