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.