Currency: Rupee weakens, overnight rates high

KARACHI: The rupee weakened to 86.82/87 to the dollar, compared with the previous day’s close of 86.70/76, 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. Pakistan’s current account deficit surged to a provisional $908 million in September, compared with a deficit of $201 million in the previous month, according to data from the State Bank of Pakistan. In the money market, overnight rates rose to end between 11% and 11.50%, compared with Thursday’s close of 9%, amid tight liquidity in the interbank market.

Published in The Express Tribune, October 22^nd, 2011.