The Pakistani rupee witnessed a slight appreciation against the US dollar in the inter-bank market on Monday, continuing its trend of cautious stability against the greenback. At the close of trading, the rupee settled at Rs 281.25, marking a minor improvement of Re0.01 from the previous session.
This movement reflects the local currency’s resilience amid steady dollar inflows and balanced demand from importers. During the preceding week, the rupee had posted a modest gain of Re0.11 or 0.04%, closing at Rs 281.26 compared to Rs 281.37 a week earlier, according to data released by the State Bank of Pakistan (SBP).
Currency analysts attribute the rupee’s stability to a combination of improved remittance inflows, controlled import demand, and the central bank’s firm monitoring of market dynamics. They noted that while Pakistan continues to face external account pressures, exchange rate volatility has reduced significantly compared to the previous fiscal year.
On the international front, major currencies exhibited sharper movements, with the Japanese yen experiencing a notable decline. The yen tumbled 1.6% against the US dollar, marking its steepest one-day drop in five months, following Sanae Takaichi’s victory in Japan’s Liberal Democratic Party (LDP) leadership election. Her win has fueled expectations of expansionary fiscal policies, putting additional pressure on the Bank of Japan to balance economic stimulus with inflation management.
The yen’s slide to 149.81 per US dollar effectively erased gains made in the previous week, highlighting renewed volatility in the Asian currency markets. However, with several regional markets closed for holidays, overall trading volume remained limited.
Meanwhile, the US dollar index slipped 0.1% to 98.029, continuing its recent downward trend. Analysts suggest the decline stems from growing speculation that the Federal Reserve will introduce another rate cut during its October policy meeting. Futures markets now imply a 94.6% probability of a 25-basis-point reduction, according to the CME Group’s FedWatch tool.
Global sentiment has also been shaped by rising uncertainty in the United States, where political gridlock and potential government shutdown risks weigh on investor confidence. Contracts on Polymarket currently indicate a 70% chance that the shutdown could extend beyond mid-October.
Oil prices, a key influencer of exchange rate dynamics in energy-importing economies like Pakistan, recorded modest gains on Monday. Brent crude futures rose by 1.1% to $65.24 per barrel, while West Texas Intermediate (WTI) crude increased 1% to $61.47. The upward movement followed OPEC+’s announcement of a smaller-than-expected production hike for November, easing concerns about oversupply while maintaining a cautious outlook on global demand recovery.
In the inter-bank market, dollar bids and offers were reported at Rs 281.25 and Rs 281.45, respectively, showing narrow movement within the day’s range.
In the open market, the rupee lost 2 paise for buying and remained unchanged for selling against the US dollar, closing at Rs 281.85 and Rs 282.30, respectively. Against the euro, the rupee appreciated by Rs 1.02 for buying and 66 paise for selling, closing at Rs 329.21 and Rs 332.86. It also strengthened slightly against the UAE dirham, gaining 5 paise for buying and 6 paise for selling to close at Rs 76.76 and Rs 77.50, while against the Saudi riyal, it held steady for buying and improved by 2 paise for selling to end at Rs 75.02 and Rs 75.65.
Market participants remain cautiously optimistic, expecting the rupee to trade within a narrow range in the coming days. Analysts emphasize that future stability will depend on external financing inflows, global commodity price trends, and the continuation of macroeconomic discipline under Pakistan’s IMF-supported reform program.
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