Karachi, October 4, 2023 – The Pakistani Rupee (PKR) has completed an unprecedented month-long surge against the US dollar, marking a historic turnaround for the local currency.
After hitting an all-time low of PKR 307.10 against the dollar on September 5, 2023, the PKR has experienced a remarkable recovery, reaching PKR 284.68 to the dollar.
READ MORE: Rupee Remains Strong Against Dollar for 19th Straight Session, Reaching PKR 285.72
During this historic winning streak, the PKR gained approximately PKR 22.42 or 7.3 percent against the US dollar. On October 4, 2023, the rupee further strengthened, registering a gain of PKR 1.04 to the dollar compared to the previous day’s closing rate of PKR 285.72 in the interbank foreign exchange market.
Analysts attribute the sustained appreciation of the PKR against the US dollar to a series of administrative measures aimed at stabilizing the exchange rate. These measures include a significant crackdown on currency smuggling and hoarding, which has helped curb speculative trading in the currency market.
READ MORE: Pakistani Rupee Maintains Strong Streak Against Dollar, Closes at PKR 286.76
The PKR’s impressive rebound in September 2023, with a gain of 6.3 percent against the US dollar during the month, can be attributed to several factors:
Crackdown on Illegal Currency Dealers: A substantial crackdown on illegal currency dealers in the informal gray market, where dollars were previously traded at a premium over the official rate, has played a pivotal role in stabilizing the exchange rate.
Increased Dollar Inflows: Pakistan has experienced increased dollar inflows from exporters and remittances, providing crucial support to the PKR.
Expectations of External Financing: Growing expectations of external financing from friendly nations and multilateral organizations have boosted investor confidence in the outlook for the rupee.
READ MORE: PKR Emerges as September Top Performer in Currency World
In contrast to many Asian currencies that depreciated against the US dollar following the US Federal Reserve’s announcement of prolonged high-interest rates, the PKR has emerged as a strong performer in the region. Currencies like the Thai baht and the South Korean won depreciated by more than 2 percent each during the same period.
The State Bank of Pakistan has played a proactive role in maintaining currency stability by canceling the licenses of several exchange companies involved in illegal forex transactions.
READ MORE: Pakistani Rupee Ends September on Winning Streak, Closes at PKR 287.74 Against Dollar
Analysts continue to attribute the PKR’s strength to the anticipation of external financial support from friendly nations such as China and Saudi Arabia, as well as from multilateral lenders like the International Monetary Fund (IMF) and the Asian Development Bank (ADB).
The sustained strength of the Pakistani Rupee against the US Dollar is viewed as a positive development for Pakistan’s economy. It helps stabilize prices, reduces inflationary pressures, and improves investor confidence in the country’s financial markets, indicating a potentially brighter economic outlook for the nation.
