KARACHI: The rupee hit a record low on Monday, due to increased payments for imports and gloomy sentiment surrounding the country’s economy.
Dealers expect the currency to weaken further in the coming days. The currency, at a new low for the fourth straight session, fell to 87.40/45 to the dollar compared with 87.22/27 last Tuesday, the last day of trading before Eid holidays.
“The rupee was traded at 87.47 to the dollar and there are several payments due today [Tuesday],” said a dealer at a foreign bank.
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 $11.3 billion bailout programme for more than a year.
IMF and Pakistan officials were due to meet in July, but the meeting was delayed and no new date announced. The IMF programme is scheduled to end by September 30.
Some support, however, could come from higher remittances that 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, according to official data.
Published in The Express Tribune, September 6th, 2011.