The rupee’s appreciation run in the open market came to a stop as the Pakistani currency inched lower against the US dollar on Wednesday.
Currency dealers Business Recorder reached out to said the rupee was being quoted at 301 for selling and 298 for buying purposes for customers in the open market, marginally weaker from Tuesday’s levels.
At close of trading on Wednesday, the rupee closed at 301 and 298, according to data provided by the Exchange Companies Association of Pakistan (ECAP).
The rates are still more or less equal to the rupee’s value in the inter-bank market, a rare occurrence for the local currency that has seen a volatile ride in the past few weeks.
In the inter-bank market, the rupee was hovering at 298 level against the US dollar.
Being under a programme with the International Monetary Fund (IMF), the exchange rate gap between the inter-bank and open markets – called the premium by the IMF in its country report on Pakistan published after the SBA’s approval by the Executive Board – needs to be a maximum of 1.25%.
The rupee regained momentum after authorities reportedly cracked down on smuggling of dollars.
“The crackdown on illegal exchange dealers and envisaged investment inflows from friendly countries has been the major reason for a higher fall in the rupee against the dollar in the open market than inter-bank rate,” said ex-Finance Minister Dr Hafeez Pasha while talking to Business Recorder on Tuesday.
However, he cautioned that an artificial appreciation of the rupee against the dollar would encourage imports, which would, in turn, fuel a trade deficit with negative ramifications on the current account.