The Pakistani rupee has gradually gained to close the exchange-rate difference with the interbank market, and it resumed its upward trend against the US dollar on Thursday.
The US dollar was trading in the range of 293-295 in the open market, up from 294-296 on Wednesday. The rates are a far cry from the 308-310 range that dealers were offering earlier this month.
In the interbank market, the PKR edged higher against the USD, gaining 0.06% versus the greenback during the trading session.
Meanwhile, many currency dealers contacted showed there is a large amount of USD in the market, but customers must present proof of travel to ensure “the dollar needs were genuine.”
According to experts, the improvement comes as the supply-demand balance improves as a result of government-announced actions.
“The State Bank of Pakistan’s (SBP) earlier measure of allowing banks to purchase US dollars from the interbank market has reduced the rate gap between the interbank and open market,” said Zafar Paracha, General Secretary of the Exchange Companies Association of Pakistan.
“Although our business has suffered as a result of the said measure (which has been reduced by 80%), it is a good move in order to close the dollar gap,” said the currency dealer.
Previously, the central bank permitted banks to get US dollars from the interbank market in order to settle card-based cross-border transactions through the International Payment System.
Demand from Hajj pilgrims has also decreased, and overseas Pakistanis returning to the country are also carrying foreign currency, according to Paracha.
“In addition, banks are giving cash dollars to their public depositors, which has increased inflows.”