The Pakistani rupee experienced a noteworthy surge against the US dollar, gaining Rs3.50 in the open market, marking an impressive start to the business week.
The greenback, which was priced at Rs300.5, witnessed a substantial decline of Rs24 over the past week following the government’s announcement of a stringent crackdown on dollar hoarders and smugglers.
This surge in the rupee’s value was also mirrored in the interbank foreign exchange market, where it gained Rs2.2 against the dollar. Midday trading recorded the greenback at Rs300.75, notably lower than Friday’s closing rate of Rs302.95 in the interbank market.
However, while the currency market rejoiced, the Pakistan Stock Exchange faced a slight setback. The KSE-100 Index declined by 128.14 points or 0.28%, trading at 45,885.34 levels during midday trading on Monday. Similarly, the KSE-30 Index saw a reduction of 36.79 points or 0.23%, trading at 16,208.9 levels during intraday trading.
Government authorities, under the caretaker administration, have initiated a rigorous campaign against dollar smuggling and hoarding, as they have identified individuals and companies involved in these illicit activities. The operation is backed by two years’ worth of data on exchange companies.
According to Malik Bostan, Chairman of the Forex Association of Pakistan, the rupee’s strengthening can be attributed to exchange companies ‘surrendering’ $20 million as part of the crackdown.
Rumors had circulated about plans to scan bank lockers across the country using special devices. However, officials from the State Bank of Pakistan (SBP) and the Federal Investigation Agency clarified that these reports were false. “The SBP has not initiated any such move, nor is it possible to scan lockers from the outside,” stated the SBP’s chief spokesperson, as reported by Dawn newspaper.
This surge in the rupee’s value and the crackdown on illegal dollar activities indicate a concerted effort by the government to stabilize the currency market and curb black market operations.
