In a remarkable streak of success, the Pakistani rupee has surged below Rs. 290 against the US dollar, marking its 15th consecutive working day of gains. This remarkable achievement is attributed to the substantial improvement in foreign currency inflows.

According to data from the State Bank of Pakistan (SBP), the domestic currency has made a significant recovery, gaining 0.37% or Rs. 1.06, reaching a high of Rs. 289.80 against the US dollar.

Remarkably, the rupee now stands just Rs. 1.31 away from its pre-interim government value, which was Rs. 288.49/$ in the middle of the last month.

With this latest surge, the Pakistani currency has cumulatively regained nearly 6% or Rs. 17.30 over the past 15 working days.

Recalling the recent history, the currency had faced a decline of slightly over 6% or Rs. 18.60, hitting an all-time low at Rs. 307.10 against the US dollar in the first week of September 2023, compared to Rs. 288.49/$ before Caretaker Prime Minister Anwaarul Haq Kakar took office in mid-August 2023.

Market reports suggest that foreign currency inflows have seen a positive uptick following active measures by the government and the central bank against currency smugglers, speculators, and hoarders. The SBP has taken steps to suspend the licenses of exchange companies allegedly involved in illicit trade activities.

This crackdown has resulted in increased inflows through official channels. Exporters are selling their holdings on futures counters, anticipating that the currency may recover to Rs. 260-280/$ within the ongoing upward cycle. Additionally, the inflow of workers’ remittances through official channels has also witnessed improvement in recent days.

Arif Habib Limited recently stated that the currency may further improve to Rs. 278-280/$ during this ongoing rally. Earlier, the interim commerce minister, Gohar Ejaz, mentioned that the actual value of the currency presently stands at Rs. 260/$.

In the open market, the local currency has gained 0.68%, equivalent to Rs. 2, reaching Rs. 291/$, according to the Exchange Companies Association of Pakistan (ECAP).

In the retail market, the Pakistani rupee has impressively recovered nearly 13%, or Rs. 37, over the past month.

Furthermore, the gap between the inter-bank and open market rates has narrowed down to just 0.41% (Rs. 1.20), well below the IMF recommended maximum spread of 1.25% (approximately Rs. 4).