Karachi, Pakistan
The Pakistani currency, which was on a steady losing streak, became the world’s best-performing currency in September due to a massive crackdown on illegal dollar trading, officials told Anadolu on Thursday.
The Pakistani rupee (PKR) continued to gain against the US dollar, registering a rise of 0.35% on Thursday against the dollar in the interbank market.
At the close, the dollar stood at Rs 287.74, depreciating by Rs 1.01, according to the State Bank of Pakistan. On Wednesday it stood at Rs 288.75.
Zafar Sultan Paracha, secretary general of the Pakistan Exchange Companies Association, told Anadolu that the rupee improved by almost 6% in September, higher than any other currency in the world.
He said dwindling inflows into the country have improved significantly in recent weeks following a military-backed crackdown on widespread dollar smuggling and hoarding.
Security forces have arrested several exchange agents across the country for their alleged involvement in illegal outflows of greenbacks.
“Strict measures to curb illegal outflows have virtually dismantled the gray (currency) market, forcing speculators to go underground and channel dollar inflows and outflows,” he said.
Paracha said a gradual closing of a huge Rs 30 gap in interbank and open market rates has prompted overseas Pakistanis to use banking and other legal channels to transfer dollars into the country.
Several exporters, who had suspended payments due to a wide gap between interbank and open market rates, also started releasing quantities, Paracha said.
“This trend will continue to persist in the coming days due to increased supply and decreased demand (for dollars),” he said.
However, Muhammad Suhail, a Karachi-based economist, observed that the rupee’s winning streak will depend on future economic fundamentals.
“In the short term we can see the PKR getting stronger due to the current measures taken by regulators to comply with the laws,” Suhail told Anadolu.
However, in the medium term, he said everything depends on economic fundamentals, especially foreign exchange reserves and the International Monetary Fund (IMF) loan review in November.
Pakistan got a last-minute bailout from the IMF in July to avoid a default. But in turn, the government increased oil and electricity rates, sparking protests across the country.
The dollar surpassed a record high of Rs 300 in August in the interbank market and Rs 335 in the open market, forcing the caretaker government to increase oil and energy prices.
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