The rupee continued to strengthen against the US dollar in the interbank market on Wednesday but fell in the open market.

The development comes a day after the rupee rose 0.42 per cent in the interbank market to below 300, a barrier it crossed for the first time ever on Aug 24.

According to the State Bank of Pakistan, the rupee gained 1.07 against the greenback, from yesterday’s close of 299.89, to close at 298.82 today.

Meanwhile, the Forex Association of Pakistan (FAP) said that the rupee depreciated in the open market. The dollar was changing hands at Rs301 after remaining unchanged on Tuesday at 300.

FAP Chairman Malik Bostan said that the supply of the dollar in the open market had rapidly increased over the past week. He said that exchange companies were providing greenbacks to banks after quite some time, due to which the demand in the interbank was falling.

“Therefore, the dollar has fallen below 299 in the interbank market,” he said. He expressed the hope that the difference between the dollar rates in both markets would not exceed 1.25pc, as dictated by the International Monetary Fund (IMF).

The local currency has significantly gained in the past few days, with analysts attributing the rise to an ongoing crackdown on illegal dollar outflows. Currency dealers in the interbank said exporters had been selling dollars on a large scale, fearing further devaluation.