Rupee now stronger in open market than in inter-bank market: ECAP data

The Pakistani rupee continued its appreciation run against the US dollar in the open market, strengthening beyond the value in the inter-bank market where it settled at 301.16 on Monday.

At the end of trading, the Exchange Companies Association of Pakistan (ECAP) quoted rates at Rs297 and Rs300 for buying and selling, respectively.

The rates are now lower than the rupee’s closing in the inter-bank market, a rare occurrence for the local currency that has seen a volatile ride in the past few weeks.

Earlier during the day, 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, down from Friday’s levels.

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%.

However, the premium is now in favour of the inter-bank market where the rupee is stronger.

During the previous week, the PKR gained 24.00 rupees for both buying and selling against USD, closing at 301.00 and 304.00, respectively.

The local currency has regained momentum after authorities reportedly cracked down on smuggling of dollars.

The measures kicked off after the Pakistan Army’s top brass expressed its resolve to assist the caretaker government in curbing all illegal activities which hamper economic stability, growth, and investors’ confidence, stated Inter Services Public Relations Pakistan (ISPR) on Thursday.

On Sunday, Caretaker Federal Minister for Interior Sarfaraz Ahmed Bugti announced to launch a massive crackdown on hoarders, saying there will be zero tolerance for smuggling and hoarding.

Bugti said all the state institutions and provincial authorities are committed to go to any extent to eradicate the menaces of smuggling and hoarding.

He said that an operation against smuggling of wheat, sugar, urea, dollars, and other commodities has been continuing and the government has recovered sugar and urea in a huge quantity in various parts of the country.

“The momentum is expected to extend in the coming days as well,” said market experts.

The expert said the market is also keeping an eye on the upcoming Monetary Policy Committee (MPC) on September 14 (Thursday).