In Karachi:

As the world’s best-performing currency for September, the Pakistani rupee reached a seven-week high against the dollar. According to State Bank of Pakistan data, the rupee closed at Rs287.74 against the greenback on Tuesday, gaining 0.35% or Rs1.01. Rupee named world’s best-performing currency

According to Arif Habib Limited, the Pakistan rupee surpassed the Mauritian rupee, Hong Kong dollar, and Canadian dollar as the world’s best-performing currency during September 2023. The declines of over three dozen currencies worldwide ranged from 0.1% to 6.2% during the month.

During the past 17 working days, the Pakistani currency has gained an impressive 6.73%, recovering 19.36 from its record low of Rs307.10/$ on September 5, 2023. Despite the caretaker government, the rupee has recovered to its pre-caretaker government levels as a result of this remarkable performance.

The rupee surges to a seven-week high

Ashfque Hasan Khan, an economist, attributes this extraordinary recovery to the government’s crackdown on foreign currency smugglers, hoarders, and speculators. According to Khan, earlier pessimism on the rupee, predicting it would fall below Rs300/$, had fuelled speculative depreciation, resulting in a drop of 6% (Rs18.60) between August 15 and September 5, 2023. Over time, the rupee’s value gradually returned to fair value as speculators and smugglers were arrested and punished.

Khan argued that the rupee’s recovery and the crackdown demonstrate that there is no market-based exchange rate, debunking speculators’ claims. In the interim government’s report, the rupee was estimated to be worth Rs260/$.

According to local research, the rupee may strengthen to Rs278-280/$ during this cycle. By eliminating black markets, boosting foreign currency inflows through official channels, and stabilizing foreign exchange reserves at $7.80 billion, the crackdown has effectively eliminated black markets.