The rupee increased by Rs0.9, or 0.31 per cent, against the US dollar in the interbank market on Monday, which an analyst said could be credited to the crackdown on the money market by the government.

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The dollar was trading for Rs290.86 in the interbank market at closing, according to the data published by the State Bank of Pakistan on social media platform X.

The dollar had closed at Rs291.76 in the interbank market on Friday, extending the upward trajectory that has continued since the army-backed crackdown on the illegal trade of the dollar began earlier this month.

Meanwhile, according to the Exchange Companies Association of Pakistan, the rupee gained 50 paisas against the greenback in the open market, with the foreign currency being traded at Rs293 compared to Friday’s Rs293.5.

Komal Mansoor, head of strategy at financial services firm Tresmark, said in approximately the past four weeks, the rupee had seen gains “triggered by the crackdown in open market followed by significant forward selling by exporters”.

She added that the greenback “may stabilise around 295 but may not sustain those levels for long”. However, she warned that former finance minister Ishaq Dar “made the same mistake last year, who tried to beat the rupee down to 200. That effort was followed by [a] massive devaluation in January that wiped out all his efforts”.

Zafar Paracha, general secretary of the Exchange Companies Association of Pakistan, said: “Today was another good day for Pakistan’s economy, the interbank [rate] has dropped by around Rs1 and the open market [rate] also fell by Rs2.”

He said “good results” were being witnessed because of the crackdown since inflows were improving and remittances were being retrieved from the grey market.

“In the coming time, you will see the dollar depreciate even more. Those who are hoarding dollars will be at a great disadvantage because as per international rating agencies, the dollar should stand at Rs260 and the experts that we have are also saying the same thing that the dollar should drop to a minimum of Rs260 or 270.”

Paracha said he foresaw “much improvement” in the coming days, adding that public sentiment was changing and talks about dollarisation had also come to an end.