KARACHI: The rupee gained Rs1.95 against the dollar in the inter-bank market on Monday. The US currency closed at 217.95, the State Bank of Pakistan reported.

This is the third week in which the rupee continued to gain momentum against the greenback. Finance Minister Ishaq Dar had claimed that the real value of dollar was less than Rs200, a target that the government believe it could achieve.

The dollar closed at 219.92 in the inter-bank market on Friday, the State Bank of Pakistan reported. The government has announced its decision that it would not approach the Paris Club for rescheduling its loans. “Pakistan will ensure payments of its national sovereign debt liabilities well in time,” the finance czar told reporters in Islamabad on Sunday, adding that a strategy had been evolved in this regard.

Moreover, the central bank would announce its monetary policy today (Monday). Business experts have expected a decrease in the interest rate, which now stands at 15%.

The Moody’s – one of the three top financial rating agencies – last week cut Pakistan’s sovereign credit rating by one notch to Caa1 from B3, prompting a sharp response from the finance ministry.

Dar has warned the New York-based rating agency, which made the decision because of increased government liquidity and external vulnerability risks, of a “befitting reply” if the credit agency did not reverse the downgrade of Pakistan’s sovereign credit rating.

Finance expert Asad Ali Shah told Aaj News on Friday that it was not easy for Pakistan to raise the required amount of $30 to $31 billion.

“The commitments from friendly countries as claimed by former finance minister Miftah Ismail were not that strong,” he said in an interview with Imran Sultan during the Pakistan Economy Watch show.

He added that the government’s decision to sell shares of public sector SOEs drew sharp criticism from the people. Moreover, the economic impact of floods which amounts to $32 billion would damage the economy. “It seems that Pakistan can have problems with the balance of payments because of this. But he thought that floods might help the country in funding from global lenders, contributing foreign currency.”

He also spoke about the oil prices in the international market.

He added that everyone agreed with Dar’s comment that the value dollar was around Rs200, however, he stressed that sometimes “perception is more important than the reality in the economy”.

“If you make dollar cheap than you kind of incentivize imports. Our problem is that we import too much and discourage exporters. So as it is our exports are reducing with recession and our imports are not so flexible,” Shah said.

“Our problem now is to bring stability and avoid going default.”