The Pakistani rupee had a stunning rise, reaching a nearly monthly high of Rs297.96 against the US dollar on Thursday in the interbank market. This surge marks the currency’s seventh working day in a row of gains, which is attributable to the ongoing campaign against currency smugglers.
State Bank of Pakistan (SBP) records show that the rupee increased by 0.29 percent, or Rs. 0.86, to close at Rs. 297.96 against the US dollar. With this outstanding performance, the market has gained about 3%, or Rs9.14, during the last seven days.
Indirect support for the currency’s gain came from rumours that the central bank might increase the interest rate. The SBP, however, shocked the market by maintaining its key policy rate at the current 22% level.
Another unexpected development came from the gold market in Pakistan. The local bullion pricing organisation chose not to release daily commodities prices for the second consecutive working day. This silence from the pricing body sparked rumours about possible legal action against “gold smugglers” or a negative trend in the country’s precious metal market.
In response to inquiries, a representative of the organisation formally declared that the most recent gold price, which was set at Rs215,000 per tola (11.66 grams) on Tuesday, remained in effect for the time being.
According to the Exchange Companies Association of Pakistan (ECAP), during the day, the value of the local currency on the open market increased by 1%, or Rs3, to reach Rs298 per US dollar.
Given that the pricing body takes the rupee-to-dollar exchange rate into account when determining global commodity prices for local markets, this upward trend in the open market is seen as a negative development for gold pricing in the domestic market.
The currency has now gained Rs30 over the course of eight consecutive days on the open market thanks to this most recent increase.
For reference, the rupee had fallen precipitously to a record low of Rs307.10 versus the US dollar on the prior Tuesday (September 5), a depreciation of almost 6%, or Rs18.50, in the first three weeks of the caretaker government.