Friday December 01, 2023

Dollar further down by Rs5 in open market

In open market, dollar further weakened against rupee, depreciating by 5Rs to settle at 307Rs for selling

September 08, 2023
An undated image of a currency dealer counting Rs500 notes. — AFP/File
An undated image of a currency dealer counting Rs500 notes. — AFP/File

KARACHI/ PESHAWAR: The rupee strengthened against the dollar on Thursday, extending its winning streak in both the interbank and open markets, as positive sentiment and regulatory measures boosted the local currency, dealers said.

In the open market, the dollar further weakened against the rupee, depreciating by 5 rupees to settle at 307 rupees for selling. It was the third consecutive trading session in which the dollar depreciated against the rupee, and the dollar’s value fell by a total of 25 rupees in these sessions.

In the interbank market, the rupee also appreciated against the US dollar for the second consecutive session, with the local currency gaining 2.04 rupees or 0.67 per cent to settle at 304.94.

Dealers said the rupee’s recovery in the interbank market was stronger than the previous day’s gains, as the impact of the crackdown on the grey market and stringent checks on the open market began to impact the dollar rate.

“A positive sentiment has been created in favour of the rupee in recent days, and this has begun to help the rupee in the interbank market,” a dealer said.

The gap between the rates of dollar in the interbank and open market narrowed to one per cent from over eight per cent at the start of this week.

The dealer said the latest measures by the State Bank of Pakistan (SBP) to introduce structural reforms in the exchange companies have also supported the rupee in the interbank market, as the central bank’s actions have further boosted positive sentiments.

Dealers are expecting further decline in the dollar’s value following the central bank’s regulations and the crackdown on the grey market.

“The SBP’s latest move to consolidate and transform various types of existing exchange companies and their franchisees into a single category of exchange companies with a well-defined mandate also supported the rupee in the interbank market,” another currency dealer said.

“The announcement has created a positive sentiment in favour of the rupee as it will improve transparency and efficiency in the exchange business.”

He said he expected the rupee to appreciate to around 300 rupees against the dollar in the next few weeks, as the central bank’s measures begin to take full effect.

Dealers said all developments in the exchange business have followed the meeting of Chief of Army Staff General Syed Asim Munir with the business community of the country.

“The meeting of the army chief resulted in the crackdown on the grey market as well as increased vigilance at exchange companies to check dollar trading in these companies,” a dealer said.

Analysts expect the rupee to continue to appreciate against dollar in the coming days, as recent measures are expected to continue to support the local currency.

Meanwhile, several shops were sealed and many people were arrested during a major operation in Khyber-Pakhtunkhwa against illegal currency dealers in a bid to stop the smuggling and black marketing of dollar and foreign currency.

The operation was conducted by the Federal Investigation Agency (FIA) along with other agencies, mostly in the main currency market in Chowk Yadgar, Peshawar.

“We have launched a crackdown on all those involved in hundi and hawala. Raids are being conducted daily against those involved in the business,” FIA KP Director Nisar Ahmad Khan told The News.

An official said during the crackdown on Thursday, around 30 shops were sealed while many illegal currency dealers were arrested from the Sarafa Bazaar in Chowk Yadgar and other areas. The officials said all the sealed shops were involved in illegal business of hundi and hawala.

“As many as 28 illegal currency dealers have been arrested in operations during the last few days,” said FIA Commercial Banking Circle Deputy Director Afzal Niazi. He added the hub of illegal business had been closed during the action.

“No one will be allowed smuggling of dollars or get involved in hawala and hundi in any area of KP. The crackdown will continue in future as well,” said the official.

The official made it clear that only those shops in any market, which were involved in hundi and hawala business, were sealed while the rest of the legal businesses were going on as per routine.

The special operation had been launched after reports of involvement of illegal currency dealers in smuggling and stocking of US dollars that caused depreciation of the rupee in the last few weeks.

Officials said 27 raids were conducted on the illegal currency dealers and 28 people were held in the last few days during which local and foreign currency worth Rs102 million had been recovered.

Meanwhile, the FIA, during another action, arrested officials of the National Database and Registration Authority (Nadra) for issuing Pakistani identify cards to Afghan nationals.

The officials including an assistant director and a superintendent were arrested after the local court rejected their bail applications in a case lodged against them.

APP adds: Caretaker Federal Minister for Information and Broadcasting Murtaza Solangi said on Thursday that a notification about a ban on Rs5,000 currency note was fake.

In a post on X, formerly Twitter, the minister said the government would take strict action against those spreading such fake notifications.