Karachi, September 9, 2023 – The Pakistani Rupee (PKR) has experienced a remarkable appreciation of 8 percent against the US dollar during the past week in the open market, attributed to a massive crackdown against currency smuggling operations.
Throughout the week spanning from September 4 to September 9, the Pakistani rupee made significant gains of 8 percent, equivalent to PKR 26, closing at PKR 302 against the US dollar on Saturday, September 9, 2023. This marks a substantial rebound from an all-time low of PKR 328 to the dollar recorded just the previous Saturday.
Financial analysts attribute this notable increase in the value of the rupee to recent anti-smuggling efforts undertaken by law enforcement agencies. The crackdown on illegal currency movements has not only curbed black market activities but also driven open market exchange rates below interbank rates. The rupee concluded at PKR 302.95 to the dollar on September 8, 2023, in the interbank foreign exchange market.
The surge in customer demand, primarily from sellers seeking to convert their US dollar holdings, is a direct result of the intensified crackdown on currency hoarding, smuggling, and black market trading by Pakistani authorities.
These developments follow Pakistan’s recent announcement of a comprehensive crackdown against illegal currency smuggling and hoarding. The initiative gained momentum after 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 his commitment to fostering transparency in dollar exchange rates and interbank operations.
Currency smuggling to neighboring Afghanistan, along with its illicit trading in the black market, had caused a significant disparity between interbank and open market exchange rates in the previous week. Currency traders had voiced concerns about customers being coerced into engaging in unauthorized transactions in the black market.
According to traders, more than 90 percent of exchange business had shifted to the black market, resulting in substantial losses for exchange companies.
The recent crackdown is seen as a positive step towards stabilizing Pakistan’s currency market, reducing illegal currency flows, and promoting a more transparent and regulated exchange system. These efforts are expected to benefit both the economy and businesses operating in Pakistan.