Rupee jumps in both currency markets

The rupee continued to gain strength on Thursday, rising by over Rs2 to the dollar in the interbank market and by Rs5 in the open market. During the last three sessions, the dollar has lost about Rs25 in the open market, whose rates have edged closer to the interbank market’s after a crackdown on hard-currency hoarders and smugglers. The State Bank of Pakistan (SBP) reported the rupee’s closing price at Rs304.94 on Thursday against Rs306.98 a day ago, a rise of 0.7pc. Currency dealers said the decline in the dollar’s interbank rate could be an impact of its fast depreciation in the open market. The interbank bank market is still short of dollars, and the importers still have to struggle to open letters of credit for imports, they said. Besides, the country’s foreign exchange reserves are also on the decline, falling by $70 million during the week ending Sept 1. The open market reported the closing rate of the dollar at Rs307 compared to Rs312 a day before. Currency dealers said the trading remained thin as both sellers and buyers were reluctant to change their holdings. While buyers expect the dollar to fall further, sellers hope it will rebound in the coming days.