KARACHI
Pakistani rupee maintained its winning streak against the US dollar for the 23rd consecutive session in the inter-bank market on Monday with an appreciation of another Rs1.04.
The State Bank of Pakistan (SBP) said in a tweet that the rupee opened at 282.69 against the dollar in the interbank market and closed at 281.65, showing an appreciation of 0.37 percent.
The rupee has advanced to the highest level of the current fiscal year 2023-23. The currency surged more than 6 percent in the past month to become the top performer in the world. The rupee has appreciated by Rs4.34 during the current fiscal year 2023-24, while it has depreciated by Rs54.23 in the current year.
Meanwhile, the local unit appreciated for the 24th consecutive session in the open market by gaining Rs5 and was quoted in the range of 275-278 a dollar against 280-283 a session earlier. The rupee has appreciated by Rs56 in the last 24 sessions.
The local currency has significantly gained in the past five weeks, with analysts attributing the rise to an ongoing crackdown on illegal dollar outflows. Currency dealers said that 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.
Former chairman of Federal Board of Revenue (FBR) Syed Shabbar Zaidi said in an interview that Afghan transit trade has an economic loss of around $6 billion for Pakistan.
He stated that Afghanistan technically uses Pakistan’s dollars to import the difference of a $6 billion deficit and this impacts local currency’s exchange rate negatively.
The central bank intensified efforts to clip the wings of the high-flying dollar and announced a list of structural reforms last month, targeting the exchange companies. The SBP stepped up supervision of the foreign exchange market, ordering banks to set up separate entities to conduct foreign exchange 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”.
The increase is also seen as a positive as it curbs speculation in the currency market. Moreover, the gap between the inter-bank and open markets has narrowed down and at present rupee is stronger in the interbank market than the open market. This meets the structural benchmark set by the International Monetary Fund (IMF). The development comes at an apt time for Pakistan which is set to enter the next review of its Stand-By Arrangement with the IMF.
