The Pakistani rupee began the week with a marginal decline against the US dollar in the interbank market, reflecting continued uncertainty in both local and international financial environments. The local currency depreciated by 0.03 percent on Monday, closing at 281.07 against the greenback—down by 10 paisas from Friday’s closing rate of 280.97.
The currency’s performance continues a trend of slight depreciation, with the rupee losing a cumulative 25 paisas, or 0.09 percent, over the course of the previous week. Despite the modest nature of the losses, the persistent downward movement underscores broader concerns about foreign exchange stability and economic fundamentals.
Currency analysts attribute the rupee’s marginal decline to ongoing pressures in the foreign exchange market, including moderate demand for dollars from importers, a restrained pace of foreign inflows, and speculative positioning ahead of key international economic events. While there has been no major domestic shock this week, broader market sentiment remains fragile, particularly with growing concerns about Pakistan’s external debt obligations and import-driven inflation.
On the global front, the US dollar made a relatively steady start to the week. Investors worldwide are bracing for a series of major economic data releases that may offer the first real insight into whether recent trade tensions under former President Donald Trump are beginning to take a toll on the US economy.
In currency markets, the greenback held its ground at 143.57 yen and $1.1360 per euro. Despite a slight bounce at the end of last week, the US dollar remains on track for its steepest monthly decline in nearly two and a half years. This comes amid shaken confidence in the long-term stability of US assets due to mixed signals from the ongoing trade standoff between the US and China.
Recent developments have shown signs of de-escalation, with the Trump administration expressing some willingness to ease tariffs and China offering exemptions on selected imports. However, confusion remains, as Beijing has denied the occurrence of any active trade negotiations, despite statements from Washington claiming progress. US Treasury Secretary Scott Bessent also refrained from confirming the resumption of tariff talks in comments made over the weekend.
Oil prices, often used as an indirect gauge of currency stability, edged higher in early trading on Monday but remain under pressure due to uncertainty over global economic growth and demand. Brent crude futures rose modestly to $66.96 per barrel, while US West Texas Intermediate crude settled slightly higher at $63.11 per barrel.
Analysts noted that the slight uptick in oil prices is more technical than fundamental. “Absence of news is pushing oil prices modestly higher as traders are positioned short ahead of potential increased OPEC+ supply from the May 5 meeting and a significant production boost in the USA,” said Michael McCarthy, CEO of online trading platform Moomoo Australia.
The Organization of the Petroleum Exporting Countries and its allies, known collectively as OPEC+, are expected to meet on May 5, where some members may propose accelerating oil output hikes for the second consecutive month. Any decision on supply changes could further influence currency markets in oil-importing countries like Pakistan, where rising energy costs directly impact the current account and inflation dynamics.
As global financial markets await more clarity on trade and monetary policy, the Pakistani rupee is likely to remain sensitive to external cues and investor sentiment. Market participants will also be keeping a close eye on upcoming fiscal and monetary updates at home, as well as the outcome of the IMF’s next review of Pakistan’s economic performance.