Currency: Rupee falls sharply against dollar

KARACHI: The rupee fell sharply on Thursday amid strong dollar demand as the interbank market reopened after public holidays. The rupee weakened to 86.60/66 to the dollar from Friday’s close of 86.25/30. “There were payments worth at least $100 million today (Thursday) and dollar inflows were soft due to the holidays,” said a dealer at a foreign bank. Looking ahead, dealers said the local unit could face further downward pressure, despite healthy remittances from Pakistanis living abroad, thanks to a widening current account deficit. The current account deficit surged to a provisional $908 million in September, compared with a deficit of $201 million in August. The deficit for the July-September quarter was a provisional $1.21 billion, compared with $597 million in the same period last year, according to data from the State Bank of Pakistan.

Published in The Express Tribune, November 11^th,  2011.