The rupee, which recovered by four per cent last week, continued to appreciate on Monday.

According to the State Bank of Pakistan (SBP), the local currency closed at Rs213.98 per dollar, up Rs1.51 or 0.71 per cent.

Forex Association of Pakistan (FAP) Chairperson Malik Bostan attributed the rupee’s rise to the International Monetary Fund’s (IMF) letter of intent and reports of assistance from friendly countries, especially Saudi Arabia.

He said the market expected that payment from the IMF would be received soon which would increase the country’s foreign reserves.

The FAP chairperson said the greenback’s real price was between 190 and 200 but speculators had “artificially increased it because of the economic issues and the risk of default”. He added, however, that the dollar would come back to its real price soon.

Mettis Global Director Saad bin Naseer said the local currency had risen because dollars were flowing into the country, adding that more inflows were expected.

Exporters, who had been holding their dollars abroad, were also bringing them into Pakistan sooner because the greenback was depreciating quickly, he added.

Naseer said there was “pressure” as the exporters were approaching the government and other bodies to urge them to stabilise the exchange rate since they were facing losses. “But this will always happen. The best suggestion is that the dollars should be converted into rupees the same day that the export [consignment] is sent and the government and banks should sign a memorandum of understanding in this regard which will end the uncertainty.”

He also said that the rupee would continue to strengthen and gain in the coming days if the political situation remained stable.

“This week’s start has been very good. Positive news is coming from every front because of which sentiments have changed,” Exchange Companies Association of Pakistan (Ecap) General Secretary Zafar Paracha said.

He added that because of the positive developments, exporters who had been previously holding onto dollars were looking to sell them but importers were waiting for the greenback to fall further.

Paracha said there were reports that Saudi Arabia would roll over a $3 billion loan and provide oil on deferred payments while the IMF tranche would be received soon which is why the PKR was recovering.

Overseas Pakistanis and exchange companies had played a very important role in the rupee’s recovery, he said. The Ecap secretary general called for incentives and rebates to be given to overseas Pakistanis and exchange companies along with designating them as an “export industry”.

Head of Research at Tresmark Komal Mansoor said the market was optimistic that the IMF tranche would be received by the end of the month. “Weak demand of the greenback, further buoyed by fall in oil prices, stability in political outlook and easing of US inflationary pressures is also lending support to the [exchange rate].”