Currency: Rupee ends flat against the dollar

KARACHI: The rupee ended almost flat at 90.68/73 to the dollar, compared with Wednesday’s close of 90.68/72 but dealers expect pressure to continue as international oil prices ended on an eight-month high on Wednesday. The rupee is likely to stay under pressure, and the State Bank on Saturday cautioned that the real challenge is to finance the projected current account deficit. The latest monetary policy announcement kept the key policy rate flat at 12 percent for the next two months. The IMF last week projected a widening of Pakistan’s budget deficit in the 2011/12 fiscal year to 7 per cent of gross domestic product, compared with the government’s revised budget target of 4.7 per cent. The deficit is likely to widen further in coming months because of debt repayments and a lack of external aid. In the money market, overnight rates ended flat at the top level of 11.90 per cent.

Published in The Express Tribune, February 17^th, 2012.