Currency: Rupee flat, overnight rates down

KARACHI: The rupee was flat amid a lack of activity in the market on Friday but dealers expect the local unit to stay under pressure for now. The rupee closed at 86.20/25 to the dollar, unchanged from Thursday’s close.

It hit a record low of 86.83 on Monday. Dealers said dollar payments are typically higher in July and August because of stronger oil demand and debt payments. They also said there were fears of portfolio outflows which could cause the rupee to weaken further. Dealers said increased remittances from Pakistanis working abroad had supported the rupee and shielded the currency from a sharp fall in recent weeks. In the money market, overnight rates ended lower between 13 and 13.25 per cent, compared with Thursday’s close of 13.40 per cent after the State Bank injected Rs86.75 billion worth of government papers in a seven-day reverse repo.

Published in The Express Tribune, August 6^th, 2011.