FX Clampdown Spurs 6.1% Rupee Gain, But Reserves Remain Tight

According to officials and market reports, the recent Pakistani crackdown of informal foreign-exchange trading activity has driven the rupee to appreciations of up to 6.1% in September.

It contributed to stabilising the currency and reduced pressure on the cost of imports somewhat. Foreign exchange reserves have been tight though, only enough to cover not much longer than two months of imports, which gives the central bank little manoeuvring room until new external financing comes in.