The Pakistani rupee gained a strengthening trend against the US Dollar, settling at 278 in interbank on Thursday.
The rupee at 278 for selling and 275 for buying purposes for customers. This marks a shift from the previous closing rates, as at the end of Wednesday’s trading, the rupee stood at 279 for selling and 276 for buying, according to data provided by the Exchange Companies Association of Pakistan (ECAP).
Simultaneously, in the interbank market, the rupee was holding steady at the 278 level against the US dollar. This is significant as the gap between rates in the interbank and open markets is required to be less than 1.25% according to one of the structural benchmarks set by the International Monetary Fund (IMF).
This recent trend of rupee appreciation follows concerted efforts by the State Bank of Pakistan (SBP) to curtail the soaring value of the US dollar. Last month, the SBP introduced a series of “structural reforms” aimed at regulating the activities of Exchange Companies (ECs).
In addition to the central bank’s measures, the caretaker government also took administrative steps to crack down on smuggling and hoarding of currency. As a result, there were nationwide raids reported, with numerous illegal currency exchanges shut down and foreign currency worth millions confiscated.
On a recent note, the SBP suspended the authorization of five Exchange Companies categorized as ‘B.’ These companies include M/s International Exchange Company –B (Pvt) Limited, M/s World Wide Exchange Company –B (Pvt) Limited, M/s World Exchange Company –B (Pvt) Limited, M/s Universal Exchange Company –B (Pvt) Limited, and M/s United Exchange Company –B (Pvt) Limited. This suspension was enacted due to serious violations of the central bank’s regulations and instructions, and it is effective immediately until further orders are issued.
