Currency: Rupee weakens, overnight rates flat

KARACHI: The rupee weakened to 87.34/39 to the dollar compared with Thursday’s close of 87.18/22 because of increased import payments following a rise in international oil prices. The rupee hit a record low of 87.92 to the dollar last month. It is likely to remain under pressure because of speculation over interest rate cut and the government’s decision not to seek a new International Monetary Fund loan. In the money market, overnight rates were flat at the top end of 13.40 per cent, unchanged from the previous day’s close amid tight liquidity in the interbank market. Dealers said there were scheduled outflows of Rs294 billion ($3.37 billion) against a reverse repo through which the central bank injected Rs264 billion ($3.02 billion) on Friday.

Published in The Express Tribune, October 8^th, 2011.