Rupee remains stable against US dollar

The Pakistani rupee stayed reasonably constant versus the US dollar on Thursday, rising roughly 0.03% in the interbank market during the early hours of trading.

The currency was quoted at 283.80 at roughly 10:45 a.m., a gain of Re0.08.

On Wednesday, the rupee gained slightly versus the US dollar, finishing at 283.88 in the interbank market.

In a significant development, the US Federal Reserve raised interest rates by a quarter percentage point on Wednesday and signaled that further increases may be paused, giving officials time to assess the fallout from recent bank failures, await the resolution of a political standoff over the US debt ceiling, and monitor the course of inflation.

The unanimous vote raised the US Federal Reserve’s benchmark overnight interest rate to a range of 5.00%-5.25%.

This was the tenth consecutive hike by the Fed since March 2022.

The US dollar dipped against most major currencies on Thursday after the Federal Reserve signaled a halt in its aggressive tightening cycle, though markets were buffeted by risk aversion amid a sell-off in regional US bank shares.

After falling more than 0.6% in the previous session, the US dollar index was last 0.14% lower at 101.09.

Money markets are now pricing in a little higher-than-ten-percentage-point likelihood that the Fed will begin cutting rates in June, with around 80 basis points of rate reduction expected through the end of the year.

Oil prices, a key measure of currency parity, rebounded marginally on Thursday but were unable to recover from a more than 9% drop in the previous three days, as demand concerns among major consumers outweighed signals that the US may suspend interest rate hikes.

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