By Anadolu Agency
September 28, 2023 3:31 pmKARACHI, Pakistan
The Pakistani currency, which was on a constant losing streak, became the world’s best-performing currency in September due to a massive crackdown on illegal dollar trade, officials told Anadolu on Thursday.
The Pakistani rupee (PKR) continued to gain against the US dollar, logging a 0.35% increase Thursday against the greenback in the interbank market.
At the closing, the dollar stood at Rs287.74, depreciating by Rs1.01, according to the State Bank of Pakistan. It stood at Rs 288.75 on Wednesday.
Zafar Sultan Paracha, General Secretary of the Exchange Companies Association of Pakistan, told Anadolu the rupee improved by almost 6% in September, which is higher than any other currency around the world.
He said the country’s dwindling inflows have significantly improved in recent weeks following an army-backed crackdown on widespread smuggling and hoarding of dollars.
Security forces have arrested several money exchange dealers from across the country for their alleged involvement in illegal outflows of greenbacks.
“Strict measures to curb the illegal outflows, have practically dismantled the gray (currency) market, forcing the speculators to go underground and channelizing the inflows and outflows of the dollar,” he said.
Paracha said a gradual plugging of a huge gap of Rs 30 in interbank and open market rates, has prompted overseas Pakistanis to use banking and other legal channels to transfer dollars to the country.
Several exporters, who had stopped payments due to a big gap in interbank and open market rates, have also started releasing amounts, said Paracha.
“This trend will continue to persist in coming days due to increasing supplies and decreasing demands (of dollars),” he said.
Muhammad Suhail, a Karachi-based economist, however, observed that the winning streak of the rupee will depend on future economic fundamentals.
“In the short run we may see the PKR strengthen due to ongoing measures taken by the regulators for compliance with laws,” Suhail told Anadolu.
However, in the medium term, he said it all depends on economic fundamentals, especially Forex reserves and the International Monetary Fund’s (IMF) Loan Review in November.
Pakistan secured a last-minute IMF bailout in July to avoid a default. But in turn, the government increased petroleum and electricity tariffs, sparking nationwide protests.
The dollar crossed a record Rs 300 mark in August in the interbank, and Rs 335 in open market, forcing the caretaker government to increase petroleum and power prices.
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