September 20, 2023 (MLN): The Pakistani rupee (PKR) appreciated by 1 rupee against the US dollar in Wednesday's interbank session as the currency settled the trade at PKR 293.88 per USD, compared to the previous session's closing of PKR 294.90 per USD.
The currency saw an intraday high (bid) of 293.9 and a low (ask) of 293.7.
In the open market, the local unit lost 1 rupee against USD as the Exchange Companies quoted the dollar at 296 for buying and 299.5 for selling, compared to the previous closing of 295 for buying and 298 for selling.
The ongoing crackdown against speculators, hoarders, and smugglers to restrict illegal dollar outflows is effectively strengthening the PKR against the USD.
This crackdown has also exposed various bank staff members who colluded with these hoarders to store large amounts of dollars, which were subsequently used for hawala/hundi transactions, Malik Bostan Chairman of Exchange Companies Association of Pakistan (ECAP) told Mettis Link News.
According to the Chairman, this positive trend is expected to extend if the crackdown against the smuggling of dollars continues.
“In the near future, it is expected that the PKR may reach 250 against the greenback,” he added.
Moreover, exchange companies used to transfer $5 million per day, but due to improved transparency this has now improved to $15m per day.
Improved transparency, coupled with stringent measures against dollar smuggling, is expected to enhance the inflow of remittances to $2.2 billion.
It is pertinent to note that workers' remittances dropped by 23.74% YoY to $2.09 billion in August.
The State Bank of Pakistan (SBP) has also introduced certain reforms to consolidate and transform various types of exchange companies into a single category with a well-defined mandate and higher capital requirements.
These reforms also apply to the banks actively engaged in foreign exchange business, requiring them to establish wholly owned ECs to cater to the legitimate foreign exchange needs of the general public.
In accordance with these guidelines of the Central Bank, certain banks including MCB Bank Limited (PSX: MCB), Meezan Bank Limited (PSX: MEBL), and United Bank Limited (PSX: UBL), have decided to establish their own exchange company.
In comparison to major currencies, PKR gained 98.8 paisa against the Euro, closing at 314.29 compared to the previous value of 315.28.
The British Pound became cheaper by 1.93 rupees closing at 363.402 compared to 365.33 from a day ago.
The Swiss franc saw losses of 1.72 rupees, closing at 327.45 compared to 329.17 from the previous session.
Against the Japanese Yen, PKR gained 1.33 paisa, closing at 1.98 versus 1.997 a day ago.
The Chinese Yuan lost 14.9 paisa, closing at 40.27 against 40.42 from the previous session.
The U.A.E Dirham decreased in value by 27.78 paisa from 80.29 a day ago to 80.01.
The Saudi Riyal closed at 78.34 with a loss of 27.62 paisa from its value of 78.62 a day ago.
During the current financial year, PKR has depreciated against the Dollar by 7.89 rupees or 2.69%. While the current calendar year has seen PKR depreciate by 67.45 rupees or 22.95%.
In the Money Market, the benchmark 6-month Karachi Interbank Bid and Offer rates were unchanged at 22.83% and 23.08%.
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Posted on: 2023-09-20T16:34:58+05:00