Unending: Rupee hits fresh low at 87.50
The rupee hit a record low on Tuesday for the fifth consecutive trading session amid increased payments for imports and gloomy sentiment surrounding the country’s economy, dealers said.
The rupee closed at 87.41/46 to the dollar compared with 87.40/45 on Monday and dealers expect the currency to weaken further in coming days. “The rupee was traded as low as 87.50 to the dollar and there were at least three major payments,” said a dealer at a foreign bank. This compared with the previous record low of 87.47 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 $11.3 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.
In the money market, overnight rates ended flat at the top level of 13.40 per cent, and dealers said they were awaiting a fortnightly treasury bill auction due to be held on Wednesday in which they expect no change in the cut-off yields.
Published in The Express Tribune, September 7th, 2011.
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I would like to add that it is really surprising to observe that SBP is just acting as a silent spectator nd not intervening in the market inspite of having $18 bn in the forex reserves. If you compare pur currency in the regional market; you would come to conclusion that it is one of the weakest in the whole region.
Although it will provide temporary boost to the exports but in the long run it is going to undermine the Pak economy. The reason being that imports will become costlier and country's foreign debt will shoot up. It would ultimatley result in hyper inflation as most of our product use imported items. If India & Bangladesh can ensure stability of their currencies then why can't we. Are we incompetent or we do not have the capability to do so? When US Dollar is losing value worldwide, why our currency does not get strong. Why our currency never appreciates just like othe regional currencies? I jjust fail to understand.
I would like to request the government to play its due role and support the local currency and save it frm hitting new low on daily basis.
by 2015 pak rupee will be in the last 20 countries with the lowest values due to security reasons in the country. Poverty levels will go above 35 % and there will be wide spread social unrest.
experts say it will go down to 92.5 by the end of this yr.