Rupee ends first session of 2023 in red against US dollar
Pakistan's rupee ended the first session of the year with a marginal loss against the US dollar, depreciating for the tenth consecutive time in the inter-bank market on Monday. As per the State Bank of Pakistan (SBP), the rupee closed at 226.94 after a fall of Re0.51 or 0.22% against the greenback. During the previous week, the rupee registered a cumulative depreciation of 0.35% against the US dollar in the inter-bank market. The local currency closed at 226.43 against the greenback, taking total depreciation to 22% during 2022.
In a key development, the National Security Committee (NSC) on Monday agreed on undertaking concrete steps including import rationalisation as well as preventing illegal currency outflows and Hawala business. Meanwhile, the Consumer Price Index (CPI)-based inflation clocked in at 24.5% in December on a year-on-year (YoY) basis, showed data released by the Pakistan Bureau of Statistics (PBS) on Monday.
Internationally, the US dollar eased on Tuesday as investors awaited the minutes from the last U.S. Federal Reserve policy meeting, and the yen was its strongest in six months amid speculation that the Bank of Japan might move away from its ultra-easy policy.
The dollar index, which measures the greenback against six major currencies, has made a subdued start to 2023 and was last down 0.096% at 103.540.
The dollar index rose 8% last year in its biggest annual jump since 2015 on the back of the Fed raising interest rates to tackle inflation. Investor attention this week is fixed on the minutes of the Fed's December policymaking meeting, which are due to be released on Wednesday, with traders looking for clues to what rate path is likely to be taken in 2023.
Oil prices, a key indicator of currency parity, held in a narrow range on Tuesday, though the outlook for demand was clouded by a weak manufacturing activity survey from China, and a warning from the head of the International Monetary Fund that the global economy faced a tough year ahead.