Pakistani currency rupee gets stronger in open market today, dollar closed at Rs 301 in interbank against PKR300 last working day.
Pak Rupee Gets Stronger in Open Market Today
A recent crackdown on illicit currency traders has resulted in significant positive results. The dollar’s open market exchange rate fell below its interbank market rate on Monday. A plentiful supply of dollars is now available on the open market, according to currency dealers. This week, they plan to sell over $100 million to banks.
Comparatively, they sold $20 million in the last two days of the previous week. On Friday, the State Bank of Pakistan reported that the dollar closed at Rs301.16, down from Rs302.95 on Friday.
Nevertheless, the open market witnessed a more interesting development, with the dollar falling by 32 Rs in just six days, reaching Rs300. In the open market, the dollar’s value dropped because of higher supplies and lower demand. In the open market, the dollar’s buying rate was Rs297, a drop of Rs3.
As a comment on the situation, Zafar Paracha, General Secretary of the Pakistan Exchange Companies Association said, “It was not the first time that the dollar fell below the interbank market rate, but this time it was the outcome of the crackdown on illegal currency trading, which eroded the grey market from Pakistan.”
In an interview with Zafar Paracha, he explained that ongoing efforts to curb illegal currency trading have had a significant impact on the market and have increased the availability of excess dollars. Additionally, exchange companies deposited $20 million in the last two days of last week, and they anticipate sales of between $100 million and $150 million this week.
After Crackdown, Dollar’s Rate Drops Rapidly in Open Market
It is possible that this favorable situation could have arose earlier, preventing a severe currency shortage in the country. Dollar exchange rates in the open market had reached Rs. 332 prior to the crackdown on the grey market, and they were even higher in the grey market by Rs10 to Rs15.
The excess supply of dollars was originally sold to banks on the grey market.
According to estimates, this illicit grey market activity cost the country $8.2 billion in FY23.
Remittances declined by Rs4.2 billion and export proceeds decreased by $4 billion.
Despite widespread smuggling and illegal foreign exchange trading, the nation is suffering the brunt of these losses. The illicit import of Iranian petroleum products was being paid for with dollars smuggled to Afghanistan.
In order to identify oil traders involved in illegal oil trade with Iran, the interim government has apprehended numerous currency smugglers.
The largest border with Afghanistan has been closed for the past four days as part of measures to stop dollar outflows.