Rupee at record low of 85.8 to the dollar

KARACHI: The rupee fell to a record low on Monday because of increased dollar demand for import payments, especially oil, and dealers said the local unit was likely to remain under pressure.

“The rupee was traded at 85.8 today (Monday) and is likely to hit 86 in the short-term,” said a dealer at a local bank.

The rupee ended at a record closing low of 85.75/80 to the dollar, compared with Friday’s close of 85.67/72. Dealers also said exporters were holding on to dollars as they expect the rupee to further weaken.

In the money market, overnight rates ended between 12 and 12.4 per cent, compared with Friday’s close of 12 per cent.

Dealers said net inflows worth Rs95 billion ($1.1 billion) were scheduled for this week, though their effect was likely to be offset by a central bank treasury bill auction on Wednesday, which has a target of Rs100 billion.

Published in The Express Tribune, July 13^th, 2010.