The Pakistani rupee registered a significant decline against the US dollar in the open market on Wednesday, while the local currency also struggled in the inter-bank market.
Currency dealers Business Recorder reached out to said the rupee was quoted at 280 for selling and 277 for buying purposes for customers.
However, at the end of trading, the currency closed at 281 for selling and 278 for buying, according to data provided by the Exchange Companies Association of Pakistan (ECAP).
Meanwhile, the rupee registered losses against the US dollar in the inter-bank market also, depreciating 1.16%. It settled at 280.29, after a decline of Rs3.26 in the inter-bank market on Wednesday.
Experts said the market is now seeking equilibrium after the local currency saw one of the longest appreciations run against the US dollar.
“Continuous appreciation of the Pakistani rupee cannot be afforded,” Fahad Rauf, Head of Research at Ismail Iqbal Securities Limited, told Business Recorder.
“This will discourage exports and incentivise imports, thus the market is seeking equilibrium,” he said.
The market expert shared that the Real Effective Exchange Rate (REER) has crossed 100 because of the continuous appreciation of Pakistani rupee.
“Some importers believe that the time is right to make dollar payment, which may have increased the demand for the greenback in the market,” he added.
The rupee saw one of the longest appreciation runs against the US dollar, which came after the State Bank of Pakistan (SBP) announced a list of “structural reforms” last month, targeting the Exchange Companies (ECs).
To date, the central bank suspended the authorisation of nine exchange companies for noncompliance of rules and regulations and serious violations.
Apart from central bank measures, the caretaker setup also ramped up efforts against smugglers and hoarders of currency and as a result, countrywide raids were reported with dozens of illegal currency exchanges barred from running operations and foreign currency worth millions confiscated.