Currency: Rupee recovers; overnight rates flat

KARACHI: The rupee recovered on Thursday as import payments waned, after hitting consecutive record lows in the last six trading sessions, dealers said. The rupee ended at 89.10/16 to the dollar, compared with Wednesday’s close of 89.25/35. The rupee traded at 89 to the dollar in the TOM (one-day forward) market and some dealers said the central bank might have verbally intervened in the currency market to support the rupee. “The rupee was traded at 85.35 (to the dollar) and there was just one small (import) payment today,” said a bank dealer. Dealers said there were few import payments - for which hard currency is required - due in the next few days, which is likely to ease pressure on the local unit. But Pakistan’s bleak economic outlook could push the rupee to fresh record lows in the medium-term. In the money market, overnight rates closed at the top level of 11.90%, unchanged from Wednesday’s close, amid tight liquidity in the interbank market, dealers said.

Published in The Express Tribune, December 9th, 2011.