KARACHI: A rigorous crackdown on illegal foreign exchange trading in Pakistan’s grey and black markets by security agencies has yielded significant results, leading to a surplus of up to $900 million in the open market.
According to details, Currency dealers have reported that this surplus has been deposited in banks, marking a notable shift in the country’s currency dynamics.
As a direct consequence of this crackdown, the Pakistani rupee has experienced a remarkable appreciation of over 6.1 percent against the US dollar in September alone. This surge effectively nullified the losses the currency had incurred in August, making it the world’s best-performing currency for the month.
Rupee’s appreciation continues, gains Rs.1.16 against dollar in interbank
Zafar Paracha, the General Secretary of the Exchange Companies Association of Pakistan (ECAP), highlighted that exchange companies’ daily average trading volume has grown significantly, from $5-$7 million to $50 million, directly resulting from the crackdown. Additionally, remittances processed through exchange companies have risen by 10 to 15 percent, with expectations of further increases through formal banking channels.
This development is particularly significant in the context of Pakistan’s economic stability, as the country has been facing challenges related to its foreign exchange reserves. A market-determined exchange rate is a crucial condition set by the International Monetary Fund (IMF) for Pakistan to receive a $3 billion bailout loan, which was agreed upon in July to avert a sovereign default. The significant improvement in currency dynamics could contribute positively to Pakistan’s economic stability and prospects.
