Rupee surges by Rs2.63 against dollar in interbank

The Pakistani rupee recovered strongly against the dollar in the interbank market on Monday, gaining Rs2.63.

The PKR closed at Rs237.02 per dollar, according to the State Bank of Pakistan (SBP). This equates to an appreciation of 1.11 per cent from Friday’s close of Rs239.65.

According to economic experts, the rupee’s recovery is a “sentimental reaction” to news that PML-N leader Ishaq Dar was returning to Pakistan to take over as finance minister.

Dar was infamous for keeping exchange rate parity managed during the last time he was serving as the country’s finance minister. However, the recovery may be short-lived as the dollar continues to strengthen in the international markets and Pakistan’s funding needs remain unmet.

Meanwhile, Forex Association of Pakistan (FAP) Chairman Malik Bostan said the primary reason for the PKR’s gains was a decline in international crude oil prices which had led to expectations of a dip in the import bill, and consequently, the trade deficit.

He said the news of Dar’s return also helped strengthen the rupee. “Dar kept the dollar’s rate fixed at Rs90 for a long time in the past … I expect speculation in the interbank market will be stopped [once Dar becomes the minister] which will improve the rupee’s value.”

Prime Minister Shehbaz Sha­rif will return to Pakistan today, accompani­ed by Dar who is set to take charge as finance minister.

On Sunday, senior party leaders met Miftah Ismail, who handed in his resignation. A statement released after the meeting confirmed that Nawaz Sharif and PM Shehbaz had nominated Dar as the finance minister.