Currency: Rupee weakens, overnight rates flat

KARACHI: Import payments and negative regional sentiment on currencies drove the Pakistani rupee to close near its record low on Friday, dealers said. The rupee ended at 87.75/80 to the dollar, weaker than Thursday’s close of 87.64/67, but still shy of its record low of 87.92 in September. However in the TOM (one-day forward) market, it traded at 87.95 according to dealers. “Next week there are fewer payments so the pressure may ease, however there is generally a weak sentiment about the economy,” said a dealer at a foreign bank. Dealers said the rupee was under pressure despite rising remittances from overseas Pakistanis, which rose to $1.02 billion in October, compared with $855.11 million in October 2010. In the money market, overnight rate ended at its top level of 11.90%, amid tight liquidity in the interbank market.

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