Rupee gains further to settle at 298.82 against dollar

KARACHI: Pakistani rupee continued its winning streak against the US dollar in the interbank market and appreciated by Rs1.07 (+0.36 percent) on Wednesday.
The State Bank of Pakistan (SBP) said in a tweet that the rupee opened at 299.89 against the dollar in the interbank market and closed at 298.82, showing an appreciation of 0.36 percent. The rupee appreciated against the US dollar in the interbank market by Rs2.52 last week and has appreciated by Rs4.13 during the last three sessions, while it has depreciated by Rs12.83 during the current fiscal year 2023-24, and Rs71.39 in the current year.
Meanwhile, the rupee remained unchanged in the open market and was quoted in the range of 297-300. The rupee has appreciated by Rs31 in the last seven sessions.
Forex Association of Pakistan (FAP) Chairman Malik Bostan said that the supply of the dollar in the open market has rapidly increased over the past week. He said that exchange companies are providing greenbacks to banks after quite some time, due to which the demand in the interbank is falling. “Therefore, the dollar has fallen below 299 in the interbank market,” he said.
He expressed the hope that the difference between the dollar rates in both markets would not exceed 1.25 percent, as dictated by the International Monetary Fund (IMF).
The local currency has significantly gained in the past few days, with analysts attributing the rise to an ongoing crackdown on illegal dollar outflows. Currency dealers in the interbank said exporters have been selling dollars on a large scale, fearing further devaluation. Moreover, reports of increased vigilance of the Afghan transit trade also contributed to the rupee’s rise, they added.
On the other hand, the SBP has also stepped up supervision of the foreign exchange market, ordering banks to set up separate entities to conduct forex transactions and extending a clampdown on hard-currency hoarders and smugglers. The central bank has also decided to introduce structural reforms in the exchange companies’ sector to provide “better services to the general public and bring transparency and competitiveness”.
In a related development, inflows of home remittances posted a decline of 22 percent during the first two months of this fiscal year (FY24), the SBP reported on Monday. According to the SBP, Pakistan received workers’ remittances amounting to $4.12 billion in July-August of FY24 compared to $5.25 billion in the same period of last fiscal year (FY23), a massive decline of 21.6 percent or $1.13 billion. – TLTP