Open-market: rupee closes unchanged against US dollar

The Pakistani rupee remained unchanged against the US dollar in the open market on Monday.

Currency dealers Business Recorder reached out to said the rupee was quoted at 297 for selling and 294 for buying purposes for customers in the open market.

During the previous week, the rupee enjoyed a winning run, with the gap between the two markets narrowing well within the limit prescribed by the International Monetary Fund (IMF). In the open market, the PKR gained 7.00 rupees for both buying and selling against USD, closing at 294.00 and 297.00, respectively.

The open-market rates are now close to the rupee’s value in the inter-bank market, reducing the premium that is one of the structural benchmarks of the IMF programme.

In the inter-bank market, the rupee gained marginally against the US dollar on Monday. It settled at 295.95.

The rupee has regained momentum in recent weeks, owing to a countrywide crackdown by law enforcement agencies against illegal exchanges and smugglers of currencies.

Apart from the government’s administrative measures, the State Bank of Pakistan (SBP) also announced structural reforms, directing commercial banks to establish their own ECs as fully-owned subsidiaries. So far, three banks have announced establishing the ECs.

However, economic experts have warned that such an artificial appreciation of the rupee would encourage imports, which would, in turn, fuel a trade deficit with negative ramifications on the current account.