Pakistani Rupee Surges Against US Dollar
The Pakistani rupee continued its upward trajectory against the US Dollar today, with an initial opening rate of 305 in the interbank market.
By noon, it showed a strong bullish trend, surging to as high as 297, marking an impressive gain of approximately Rs. 8 against the greenback. This rise was in sync with the enthusiastic opening-bell trading, which pushed open market rates to the 296 category before experiencing some fluctuations.
Subsequently, the interbank rate moderated to around 299 between 1:30 PM and 2:30 PM and maintained this level for the remainder of the day.
Open market rates, which had been at 338-335 on Monday, settled in the 296-298 range today. Since September 4th, open market rates have made a significant recovery of approximately Rs. 40 against the US Dollar.
At the close of the day’s trading, the PKR had appreciated by 0.42 percent, closing at 299.89, with a daily gain of Rs. 1.27 against the US Dollar.
The gap between interbank and open market rates has substantially narrowed by around Rs. 41 in September. Starting from 337 reported last Monday, the rates have fluctuated between brief spikes to reach 299 today. Money exchange businesses have observed a considerable influx of sellers and exporters eager to take advantage of the rupee-to-dollar rate, which is expected to stabilize around 295-298 this week.
Economic Analyst A. H. H. Soomro commented on the situation, saying,
“Speculators have faced consequences, especially after strict measures were taken following discussions at the SIFC level. The Rs. 35 reversal in the open market (similar in the grey market) has sent a clear message amidst concerns of punitive actions. The State Bank of Pakistan (SBP) has also taken action by increasing the capital requirements for exchange companies. Today, UBL announced its plans to establish its own foreign exchange company. The sentiment has significantly improved, and reportedly, SBP is buying from the interbank market to bolster foreign exchange reserves. We hope that remittances and exports will return to the formal channel.”
Notably, the rupee has depreciated by nearly Rs. 80 since January 2023 and by over Rs. 127 against the US Dollar since April 2022. In light of today’s exchange rate movements, the PKR has gained over Rs. 1.2 against the dollar.
Over the past week, the federal government and state agencies have launched a major crackdown on black market dealers, which has contributed to the strengthening of the PKR’s value. In recent days, many exporters have visited currency exchange counters to exchange dollars in large quantities. If this momentum continues, it is possible that the market could correct itself by another Rs. 10 in the coming days or weeks.
In the interbank market today, the PKR showed gains against other major currencies as well. It appreciated by 43 paisas against the Canadian Dollar (CAD), 74 paisas against the Australian Dollar (AUD), Rs. 1.53 against the Euro (EUR), and Rs. 2.73 against the British Pound (GBP). Additionally, it gained 34 paisas against the Saudi Riyal (SAR) and 34 paisas against the UAE Dirham (AED).