Currency: Rupee weakens, overnight rates down

KARACHI: The rupee weakened to 86.70/76 to the dollar on Thursday, compared with the previous day’s close of 86.66/71, amid increased import payments. The rupee firmed in the previous trading sessions on healthy remittances from Pakistanis living abroad, but dealers said a widening current account deficit means that the local currency could experience downward pressure in days ahead. In the money market, overnight rates ended at their floor of 9%, compared with Wednesday’s close of 11.90%, amid increased liquidity in the interbank market. Dealers said there were scheduled inflows of Rs235 billion ($2.71 billion), against outflows of Rs113 billion.

Published in The Express Tribune, October 21^st, 2011.