Pakistani Rupee
Bloomberg reported on Thursday that the caretaker government’s continued crackdown on illegal dollar trade in Pakistan is propelling the Pakistani rupee to become the top-performing global currency in September.
The local currency achieved an impressive 6% gain against the dollar this month, surpassing declines seen in the Thai baht and South Korean won against the greenback.
Speculation about sustained high US interest rates led to major currencies weakening against the dollar.
On Thursday, the rupee strengthened by 0.1% to reach 287.95 per dollar, recovering from a record low of approximately 307 earlier this month. Pakistan’s currency market will be closed on Friday due to the Eid Miladun Nabi holiday.
Khurram Schehzad, the CEO of Alpha Beta Core Solutions Pvt Ltd, pointed out, “Many leakages were happening through illegal channels of hawala and hundi trade from the open market.” He explained that when the dollar rate reverses, hoarders and exporters holding their export proceeds begin selling their dollars.
The interim government intensified its efforts by cracking down on individuals involved in illegal dollar trade, which contributed to the rupee’s recovery.
Bloomberg reported that the Federal Investigation Agency conducted raids across the country, deploying security officials in plainclothes at money exchanges to monitor dollar sales as part of the crackdown.
Caretaker Prime Minister Anwaar-ul-Haq Kakar stated this week that the rupee’s gain is “fostering optimism for stability.”
Additionally, the State Bank of Pakistan increased capital requirements for smaller exchange companies and mandated that large banks establish their own exchange companies to enhance transparency and monitoring in the retail foreign exchange market.
