USD/PKR: Pakistani Rupee Steady Ahead of Inflation Report

Pakistani Rupee remains stable against the greenback as currency traders are bracing for the inflation report in Pakistan. At the foreign exchange market, the USD/PKR exchange rate closed marginally lower at 154.30 compared to the previous week closing rate of 154.40. The State Bank of Pakistan (SBP) reported that in the open market Rupee’s value fluctuated between Rs 154.63 and Rs 154.00 respectively.

Pakistan’s yearly inflation rate rose to 12.42% in December of 2019 and according to the market consensus the annual rate of inflation is forecast to remain steady at 12.4%. According to the Pakistan Bureau of Statistics, inflation eased mainly due to lower prices of food.

The second piece of data that has the potential to drive the USD/PKR exchange rate is the Wholesale Price scheduled to be released at 10:00 AM UTC. Pakistan’s Wholesale Price Index data increased to 12.3% in December and it’s forecast to inch higher to 12.9% in the first month of the new year.

As a proxy-risk event, China’s trade balance figures scheduled to be released on Friday, 7 February can cause some volatility. China is regarded as the second biggest trade partner of Pakistan. In this regard, a slump in Chinese exports can negatively affect the PKR exchange rate.

The trade surplus in China narrowed to USD 47.21 billion in December of 2019 amid the US-China trade war. According to the market consensus, China’s trade surplus is expected to ease.

The benchmark equity index Karachi Stock Exchange KSE-100 Index registering a loss of -0.65%, after it settled at 41,630 on Friday, and was seen trading on Monday morning Pakistan trading hours at 40,652 down -2.35%. Year-to-date the Pakistan stock exchange market gains have diminished to 2.20%.

The Pakistan 10-year government bond yield was seen quoted at 11.405 versus 11.128 previous closing rates.

On the other hand, the dollar index, which gauges the greenback’s strength against a basket of major currencies, settled down -0.51 at 97.36 on Friday.

During early Asia trading hours, the USD/PKR exchange rate was seen stabilizing at 154.50.

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