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The Pakistani rupee maintained its positive momentum against the US dollar in the open market, narrowing the gap with the inter-bank rate. This convergence is considered a significant benchmark of the International Monetary Fund’s (IMF) Stand-By Arrangement (SBA).
According to reports from currency dealers, the rupee was being quoted at 305 for selling and 302 for buying in the open market for customers, marking a decrease from Thursday’s levels. At the close of trading, the rupee was quoted at 304 for selling and 301 for buying, as reported by the Exchange Companies Association of Pakistan (ECAP).
In the inter-bank market, the rupee made substantial gains against the US dollar, settling at 302.95.
The recent strength of the local currency is attributed to government measures taken to crack down on the smuggling of dollars. Additionally, Pakistan’s top military officials expressed their commitment to assisting the caretaker government in curbing illegal activities that have an adverse impact on economic stability, growth, and investor confidence.
Currency dealers noted that exchange companies (ECs) have surrendered $20 million to the inter-bank market over the last two days due to a lack of demand in the open market.
The exchange rate gap between the inter-bank and open markets, referred to as the premium by the IMF in its country report on Pakistan, needs to be around 1.25% under the IMF program. Recent concerns over Pakistan’s increasing imports, a widening current account deficit, and declining foreign exchange reserves have put pressure on the rupee.
