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 was being traded at Rs240 around 3:45pm, 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."

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

On a leash
Updated 22 Feb, 2024

On a leash

Shehbaz will not find it easy to introduce the much-needed major changes to the economy without running into resistance.
Shameful veto
22 Feb, 2024

Shameful veto

THE US has scored a hat-trick by vetoing, for the third time, a resolution in the UN Security Council calling for an...
Truth under threat
22 Feb, 2024

Truth under threat

AS WikiLeaks founder Julian Assange mounts a last-ditch effort against being extradited from the UK to the US, one...
Silencing the public
Updated 21 Feb, 2024

Silencing the public

Acting as if it is unaccountable, it is now curtailing citizens’ digital rights without even bothering to come up with a justification.
Fitch’s concern
Updated 21 Feb, 2024

Fitch’s concern

It warns that “near-term political uncertainty may complicate the country’s efforts to secure a financing agreement with the IMF to succeed the Stand-by Arrangement”.
Zoo zealotry
Updated 21 Feb, 2024

Zoo zealotry

IN a bizarre twist of faith and fur, the Indian right-wing Hindu nationalist group, Vishwa Hindu Parishad, has...