KARACHI: The rupee hit a record low on Tuesday following increased payments for imports and gloomy sentiment surrounding the country’s economic and political outlook.
It was the third trading day in a row the local currency took a beating, and dealers expect the downward pressure to continue.
The rupee closed at 87.22/27 to the dollar, compared with Monday’s close of 87.15/20.
“During the day, the rupee was traded at 87.36 to the dollar as there were three, four oil payments,” said a dealer at a local bank. The figure compares with the previous record low of 87.23 made on Monday.
Stalled payments from a bailout programme by the International Monetary Fund (IMF) are also hammering the rupee. The IMF has criticised the government for its patchy implementation of fiscal reforms and has held back the sixth tranche of an $11 billion bailout programme since August last year. IMF and Pakistan officials were due to meet last month, but the meeting was delayed and no new date has been announced.
Some support, however, could come from higher remittances from overseas Pakistanis. According to official data, remittances rose 38.57 per cent to $1.1 billion in the first month of 2011/12 fiscal year, compared with $791.18 million in the same period last year.
In the money market, overnight rates rose to end at the top level of 13.4 per cent, compared with the previous day’s close of between 13 per cent and 13.25 per cent amid increased liquidity in the interbank market.
Published in The Express Tribune, August 31st, 2011.