Karachi, September 7, 2023 – The Pakistani Rupee (PKR) has undergone a significant recovery in both the interbank and open markets, thanks to a comprehensive crackdown launched by authorities in Pakistan against currency smuggling and the black market.
On September 7, 2023, the local currency exhibited remarkable gains, with the PKR appreciating by over PKR 2 in the open market. This substantial increase in the value of the rupee against the US dollar comes in response to the special monitoring and enforcement measures initiated by Pakistani authorities.
READ MORE: Pakistani Rupee Makes Sharp Recovery to End at PKR 304.94 to the Dollar
Exchange companies reported a surge in customer demand, particularly from sellers looking to convert their US dollar holdings. This uptick in demand can be attributed to the intensified efforts by authorities to crack down on currency hoarding, smuggling, and black market trading.
These developments follow Pakistan’s recent announcement of a crackdown against illegal currency smuggling and hoarding. The initiative was set in motion following a meeting between Army Chief General Syed Asim Munir and prominent business figures in Lahore and Karachi. During the meeting, the Army Chief assured the business community of fostering transparency in the dollar exchange rates and interbank operations.
READ MORE: PKR Recovers Against US Dollar in Volatile Interbank Trading
Currency smuggling to neighboring Afghanistan, coupled with its illegal trading in the black market, had widened the gap between interbank and open market exchange rates in the previous week. Currency traders had expressed concerns about customers being coerced away from exchange companies to engage in unauthorized transactions in the black market.
According to traders, more than 90 percent of exchange business had been diverted to the black market, resulting in significant losses for exchange companies.
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The recent crackdown is seen as a positive step toward curbing illegal currency activities and promoting transparency in the foreign exchange market. It has also helped stabilize the PKR and narrow the gap between interbank and open market rates, offering relief to both businesses and consumers.
