Rupee hits two-month high, gold soars

The Pakistani rupee reached a two-month high at Rs278.13 against the US dollar, while gold prices surged to a new record of Rs268,000 per tola (11.66 grams) on Monday.

According to data from the State Bank of Pakistan (SBP), the domestic currency increased by Rs0.03 on a day-to-day basis, marking its fifth consecutive working day of gains. Over these five days, the rupee has appreciated by a total of Rs0.57 against the dollar. During the trading day, the currency briefly dipped below Rs278/$ but closed above that level by the end of the day. In the open market, the rupee remained stable at Rs280.75/$, according to the Exchange Companies Association of Pakistan (ECAP).

Market sentiment indicates the currency's upward momentum is driven by the International Monetary Fund's (IMF) announcement that its executive board will consider approving a $7 billion loan programme for Pakistan on September 25.

Approval of the loan package is expected to unlock further funding from other multilateral and bilateral sources, including last week's $320 million financing from the Asian Development Bank (ADB).

Additionally, foreign currency inflows from export earnings and remittances from overseas Pakistanis have exceeded the demand for imports, bolstering the rupee and aiding the State Bank of Pakistan (SBP) in strengthening the country's foreign exchange reserves. The All Pakistan Sarafa Gems and Jewellers Association reported a Rs1,700 increase in gold prices per tola, aligning with global trends. Internationally, gold rose by $10 per ounce, reaching an all-time high of $2,587.

Gold prices spiked in both local and global markets amid speculation that the US Federal Reserve may cut interest rates for the first time in four years during its upcoming meeting on Wednesday.