The government’s efforts to stabilize the US dollar at Rs. 250 appear to be failing, as the greenback continues to trade above Rs. 280 in both interbank and open markets.
Following the crackdown on dollar smuggling launched on July 23, the rupee saw a brief appreciation of around Rs. 3. Despite this minor improvement, the gap between the government’s expectations and market behavior remains wide, according to a report by Dawn.
As of Wednesday, the US dollar was quoted at Rs. 285.15 in the open market and Rs. 282.87 in the interbank. Recent meetings in Islamabad involving officials from banks, currency exchanges, and the jewellery sector confirmed the government’s push for a Rs. 250 exchange rate — a target market participants largely dismissed as unachievable.
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Currency dealers report a severe shortage of major foreign currencies such as the dollar, euro, and pound. Many suggest that a parallel currency market has re-emerged, offering rates higher than those set by the Exchange Companies Association of Pakistan (ECAP).
Insiders say the perceived shortage is driven more by resistance to artificially imposed price controls than actual supply issues.
In the interbank market, banks authorized by the State Bank of Pakistan (SBP) are reportedly charging importers premium rates and prioritizing select clients, further distorting the market.
Although imports have increased in FY25 compared to the previous fiscal year, analysts say a return to Rs. 250/USD remains unlikely. Economic fundamentals, they argue, do not support a stronger rupee under current conditions.
