KARACHI: The rupee closed weaker against the dollar on Tuesday, continuing its downward trend for the second consecutive session.
The rupee finished at 278.72 to the dollar, down from 278.68 on Monday. Dealers said that the local currency will likely trade within the current range as market participants focus on the State Bank of Pakistan’s (SBP) upcoming monetary policy meeting on January 27, which may provide insights into the rupee’s future direction.
In a poll conducted by Topline Securities, 61 per cent of participants expect the central bank to announce a rate cut of 100 basis points (bps) this time. Among the remaining respondents, 7.0 per cent anticipate a rate cut of 50bps, another 7.0 per cent expect a cut of 150bps, and 17 per cent predict a cut of 200bps.
A report from Topline Securities believes that the SBP will announce a rate cut of 100bps, bringing the total cuts in this cycle to 1,000bps. This will mark the sixth consecutive cut. It also maintains its interest rate target of 11-12 per cent for December 2025.
“To mitigate the impact of any gas price hike, fuel prices resulting from increases in the petroleum development levy (PDL) and potential effects from any mini-budget, we believe the central bank will keep the real interest rate positive, ranging from 300-400bps in the medium term, considering forward-looking inflation,” it stated.