Currency: Rupee firms, overnight rates decline

KARACHI: The rupee firmed to 86.78/85 to the dollar, compared with Friday’s close of 86.82/87, amid lack of 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. For the July-September quarter, the deficit was a provisional $1.209 billion, compared with $597 million in the same period last year, according to data from the State Bank of Pakistan. In the money market, overnight rates fell to 9.10%, compared with Friday’s close of between 11% and 11.50%, amid increased liquidity in the interbank market.

Published in The Express Tribune, October 26^th, 2011.