According to Bloomberg, Pakistan’s rupee is likely to become the top performer globally this month as the interim administration continues its campaign on unlawful dollar dealings.
According to Bloomberg, the Pakistan rupee rose about 6% in September, a surprising performance given that most currencies, notably the Thai baht and South Korean won, fell against the dollar on forecasts that US interest rates will remain high for longer.
The rupee gained 0.1% to Rs287.95 per dollar on Thursday, after falling to a record low of around Rs307 earlier this month.
“Many leakages were happening through illegal channels of hawala and hundi trade from the open market,” said Khurram Schehzad, CEO of Alpha Beta Core Solutions Pvt. Ltd, a financial consultant in Karachi, to Bloomberg. It further on to say that hawala and hundi are an informal mechanism of financial transfer that is popular in South Asia.
“When the USD rate reverses everybody, the hoarders, the exporters who are holding their export proceeds, start selling their dollars,” Schehzad stated.
According to the article, the Pakistani government increased its efforts by pursuing individuals involved in unlawful dollar trades that aided the currency.
To make the retail foreign exchange market more transparent and easier to supervise, the central bank increased the capital requirements for smaller exchange companies and ordered large banks to establish their own exchange companies.
