The Pakistani rupee extended its marginal recovery against the US dollar on Thursday, appreciating by three paisas in the inter-bank market to close at Rs277.42, as Pakistan also raised $3 billion through a dual-tranche Eurobond sale.
The local currency had closed at Rs277.45 against the dollar on Wednesday. The latest movement represents a marginal gain of 0.01% as the rupee continued to trade within a relatively narrow range against the greenback.
According to inter-bank market rates, the dollar was quoted at Rs277.42 for buying and Rs277.62 for selling on Thursday.
Pakistan’s successful Eurobond transaction provided a major development for the country’s external financing position. According to the Finance Division, the $3 billion issue attracted nearly $6 billion in orders, indicating strong investor demand for the country’s international debt.
The government raised $1.75 billion through a 5.5-year Eurobond carrying a coupon rate of 7.5%, while another $1.25 billion was secured through a 10-year bond at a coupon rate of 7.9%.
The latest borrowing comes as Pakistan continues to manage its external financing requirements, with the strong order book for the Eurobond sale highlighting international investor interest in the country’s debt instruments.
In the open market, the rupee also recorded a marginal improvement against the US dollar. The local currency gained seven paisas on the buying side and three paisas on the selling side, with the dollar closing at Rs278.26 for buying and Rs279.15 for selling.
However, the rupee weakened against several other major currencies in the open market.
Against the euro, the rupee lost 62 paisas on the buying side and 48 paisas on the selling side, closing at Rs321.67 and Rs324.49, respectively.
Against the UAE dirham, the rupee lost three paisas on the buying side while remaining unchanged on the selling side, with rates closing at Rs75.68 and Rs76.28, respectively.
The rupee also weakened against the Saudi riyal, losing five paisas on both the buying and selling sides to close at Rs73.97 and Rs74.53, respectively.
In global currency markets, the Japanese yen held onto its gains on Thursday after a sudden surge in the previous session raised speculation that the move could have been driven by government authorities.
The yen was last steady at 158.88 per US dollar after gaining 0.9% overnight, keeping traders alert to the possibility of official intervention by Tokyo.
The yen has struggled to sustain gains since a rare joint yen-buying intervention by the United States and Japan on July 31. Wide interest-rate differentials, fiscal concerns and renewed increases in energy prices have continued to weigh on the Japanese currency.
The yen’s strength also kept the US dollar under pressure against other major currencies. The euro edged up to $1.1589, while sterling attempted to recover from a three-week low and was last trading at $1.3482.
Against a basket of major currencies, the US dollar eased 0.04% to 99.56.
Meanwhile, rising oil prices added another layer of pressure to global markets. Crude prices climbed to fresh six-week highs on Thursday after new US strikes on Iran and renewed Israeli threats against Tehran intensified concerns about possible disruptions to oil supplies from the Middle East.
Brent crude futures rose $1.66, or 1.7%, to $97.29 a barrel by 1200 GMT, erasing earlier losses. US West Texas Intermediate crude futures increased $2.03, or 2.2%, to $93.04 a barrel.
Both benchmark contracts were heading for their fourth consecutive day of gains after touching six-week highs earlier in the session.
For Pakistan, movements in international oil prices remain particularly important for the external account and foreign exchange market because higher import costs can increase the country’s dollar requirements.
The rupee’s marginal gain on Thursday therefore came against a backdrop of significant developments in both domestic and international financial markets, including Pakistan’s $3 billion Eurobond mobilisation, fluctuations in major global currencies and a renewed surge in international oil prices.