The rupee closed below the 278 mark for the first time in over five months as the local currency continues to make gains against the greenback.

The local currency appreciated by 0.05% in the inter-bank market, finishing at 277.91 against the dollar, which represents a gain of Re0.13 compared to the previous day’s closing. On Wednesday, the rupee had settled at 278.04, according to the State Bank of Pakistan.

The last time the rupee closed below 278 was on April 9, 2024.

Market analysts are considering the upcoming International Monetary Fund Executive Board meeting, which is set to discuss Pakistan’s 37-month Extended Fund Facility of approximately $7 billion on September 25.

Meanwhile, the US dollar experienced a broad increase on Thursday, rebounding from a recent decline following the Federal Reserve’s significant interest rate cut, which had already been anticipated by the markets.

On Wednesday, the US central bank began its monetary easing cycle with a larger-than-anticipated half-percentage-point interest rate cut, a move aimed at demonstrating policymakers’ commitment to maintaining low unemployment as inflation continues to subside.

Although investors had largely expected this significant reduction, largely fueled by various media reports leading up to the decision, it contradicted the forecasts of economists surveyed by Reuters, who had anticipated a smaller 25-basis-point cut.

In response, financial markets exhibited a typical “buy the rumor, sell the fact” behavior, which helped the dollar strengthen in early Asian trading. After hitting a more than one-year low against a basket of currencies in the previous session, the dollar managed to rebound slightly, closing at 101.03.