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The Pakistani rupee continued to strengthen against the US dollar, gaining 0.39% during the opening hours of trading in the inter-bank market on Friday.
At 10:20am, the rupee was hovering at 282.53, an increase of Rs1.09, in the inter-bank market. On Thursday, the rupee had appreciated 0.37% to settle at 283.62.
In a related development, the federal government’s total debt (domestic and external) stocks continued an upward journey, reaching a historic mark of Rs64 trillion by the end of August 2023, mainly due to exchange rate volatility.
The State Bank of Pakistan (SBP) on Thursday reported that the central government’s total domestic and external debt stocks rose by 5% during the first two months of this fiscal year (FY24).
Analysts said the debt burden is gradually increasing because of insufficient revenue collection that has forced the government to borrow from domestic and external resources to finance the soaring fiscal deficit.
Globally, the US dollar charged toward a 12-week winning streak on Friday, though it remained mostly rangebound as markets looked to US nonfarm payrolls data later in the day for clues on whether the Federal Reserve’s hawkish messaging on rates will need tweaking.
The dollar index, which earlier in the week hit a roughly 11-month high of 107.34, last settled at 106.43, but remained on track for 12 straight weeks of gains. The last time it clocked such a milestone was in 2014.
Friday’s closely-watched US jobs report comes on the heels of a run of resilient economic data which has reinforced the Fed’s rhetoric of higher-for-longer rates and sent the greenback and US Treasury yields surging.
“There’s an element here of just taking stock ahead of what should be a very important data release,” said Rodrigo Catril, senior FX strategist at National Australia Bank.
Oil prices, a key indicator of currency parity, were on track for their steepest weekly decline since March despite rising on Friday, as a US bond market sell-off sparked concerns of a global economic slowdown and worries about a sharp fall in fuel demand.
This is an intra-day update
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