The Pakistani rupee continued to gain ground against the US dollar in the open market on Wednesday, rising by Rs4 against the greenback.

According to the Forex Association of Pakistan, the rupee had gained Rs4 against the dollar and was changing hands at Rs313 at 12:15pm. It said that the dollar was selling for 313 in the open market while it was being bought for 310.

In the interbank market, however, the local currency gained 12 paisa against the dollar to come to 306.98 from yesterday’s close of 307.10.

Malik Bostan, Chairman of Exchange Companies Association of Pakistan, said that the government and the relevant authorities had taken strict steps to control the “black market” which had resulted in the gap between the open market and the interbank to reduce.

He foresaw the difference between the two rates coming down to 1.25 per cent in the coming days. “The dollar rate in Afghanistan has also fallen which has stopped smuggling from here,” he said.

Bostan expressed the hope that the interbank and open market rates would soon return to normal.

Meanwhile, Exchange Companies Association of Pakistan General Secretary Zafar Paracha said “today was a really good day for Pakistan’s economy” as the gap between interbank and open market exchange rates was narrowing.

He appreciated Chief of Army Staff Gen Asim Munir for “his role” in the positive development.

“The army chief held meetings with businessmen in different cities … and assured them that steps will be taken to improve the situation.

“He said talks were under way on foreign direct investment and commitments were made for investments of $20-25 billion which will be materialised soon.

Paracha also linked the appreciation in the rupee’s value to the launch of a drive against smuggling and action against illegal companies, explaining that this had reduced buyers in the grey market and the difference between interbank and open market rates.

Noting that the dollar was still on the rise in the open market, he urged banks to “act responsibly” and advised people not to buy dollars unnecessarily.

Komal Mansoor, head of strategy at financial services platform Tresmark, said: “Verbal intervention on multiple fronts has temporarily halted the [rupee’s] rally. Financial institutions and exchange companies were called to be reprimanded, and big corporates were shown rosy pictures, traders were dissuaded to trade above 307. Due to this, we saw a range-bound rupee this week and may even see some consolidation.”

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