The rupee continued its upward trajectory on Thursday, strengthening by Rs1.12 against the US dollar in the morning interbank market trade.

Around 9:43 am, the dollar was quoted at Rs287.63, as reported by the Forex Association of Pakistan. This marked a notable improvement from the previous day’s closing rate of Rs288.75, according to the State Bank of Pakistan’s (SBP) daily update.

In the open market, the USD witnessed a reduction of Rs1.5 against the rupee, trading at Rs288.5, as stated by the Exchange Companies Association of Pakistan (ECAP). In contrast, the dollar had been trading at Rs290 just a day earlier.

Today represents another positive day for Pakistan’s economy, with the interbank exchange rate of the dollar dropping by Rs1 and the open market rate decreasing by Rs1.50.

Zafar Paracha, the General Secretary of the Exchange Companies Association of Pakistan, attributed the ongoing decline in the value of the dollar to the government’s crackdown on illegal outflows of foreign currency, supported by the military.

Paracha expressed optimism about the future, advising those holding dollars to reconsider and have faith in their own currency over the US dollar. He believed that the situation would continue to improve, but he cautioned that gold smuggling remained a challenge.

The Pakistani rupee has been on an appreciating trend for several weeks, primarily due to the concerted efforts, backed by the military, to curb illegal dollar outflows.

However, the sustainability of this trend remains a subject of debate.

Analyst Khurram Husain pointed out in an op-ed that previous gains in the rupee’s value, during the PDM government’s crackdown on the foreign exchange market amid declining dollar reserves, turned out to be short-lived.

He emphasized that the brief period of stability in the currency market ended abruptly in January of the current year because the fundamental issue of too many rupees chasing too few dollars had not been resolved.