Rupee gains 53 paise in interbank trade
The rupee continued to recover in the interbank market on Monday, gaining 87 paise against the dollar in early trade.
The rupee, which had closed at 239.37 last week, was being traded at 238.50 around 10am, according to Mettis Global, a web-based financial data and analytics portal.
According to the State Bank of Pakistan (SBP), the local currency eventually closed at 238.84, up 53 paise or 0.22 per cent, compared to yesterday.
Meanwhile, the PKR gained Rs7 against the dollar in the open market and closed at Rs240, according to the Forex Association of Pakistan (FAP).
FAP Chairperson Malik Bostan said the government had tightened security at the border to stop the smuggling of the greenback into Afghanistan where the dollar’s value was higher. “Those involved in smuggling and speculation have faced a huge setback in the last two days … the flow of dollars to Afghanistan has stopped, the effect of which can be seen in the open market.”
He said he expected the rupee to be strengthened in the interbank market as well.
‘Pressure on rupee to ease’
A day earlier, Finance Minister Miftah Ismail voiced optimism that the pressure on the rupee, which has seen a sharp drop against the dollar in recent weeks, would ease within the next two weeks.
The minister said that he would endeavour to ensure that the dollars coming into the country on a daily basis would be more than those leaving.
Ismail said that efforts to reduce imports would bear fruit and the value of the dollar would fall, adding that an improvement would be seen within the next two weeks.
“But let me be honest, no one knows the market. I can believe the fundamentals are in my favour but speculation, sentiments also play a role.”
Separately, the SBP and the Ministry of Finance in a joint statement said the rupee was “fully expected to appreciate” in line with a reduced current account deficit and improved sentiment.
“Clearly, the rupee can overshoot temporarily as it has done recently. However, it moves both ways over time. We expect this pattern to reassert itself in the coming period.”