Rupee falls to record low
The rupee dropped by 14 paisa and hit a record low of 85.77/84 against the dollar on Monday.
KARACHI:
The rupee dropped by 14 paisa and hit a record low of 85.77/84 against the dollar on Monday, compared with Friday’s close of 85.63/71.
Hajj and Umrah seasons have been the major reasons for the weakening of the currency as demand for dollar rises from people intending to go for the pilgrimage.
“The rupee is likely to remain under pressure until the first 10-15 days of Ramazan at least,” said the President Forex Dealers Association, Malik Bostan. In Ramazan, a large number of people go to Saudi Arabia for performing Umrah.
He predicted the rupee will touch 86 to the dollar before recovering to settle around 85.50/60. Bostan said the rupee was merely reacting to the economics of demand and supply and there was nothing to get worried about.
Asad Farid, an economist, said high demand of dollar for import payments was also one of the reasons. He added the critical situation of the country, both due to floods as well as law and order, was also pressurising the rupee. One banker predicted the rupee will hit 85.90 to the dollar on Tuesday. Previously, the rupee fell to a record low of 85.75/80 on July 13 amid high dollar demand from importers as well as debt repayments.
In the money market, overnight rates rose to 12.90 per cent, compared to Friday’s close of 12.40 per cent amid tight liquidity in the market.
Published in The Express Tribune, August 3rd, 2010.
The rupee dropped by 14 paisa and hit a record low of 85.77/84 against the dollar on Monday, compared with Friday’s close of 85.63/71.
Hajj and Umrah seasons have been the major reasons for the weakening of the currency as demand for dollar rises from people intending to go for the pilgrimage.
“The rupee is likely to remain under pressure until the first 10-15 days of Ramazan at least,” said the President Forex Dealers Association, Malik Bostan. In Ramazan, a large number of people go to Saudi Arabia for performing Umrah.
He predicted the rupee will touch 86 to the dollar before recovering to settle around 85.50/60. Bostan said the rupee was merely reacting to the economics of demand and supply and there was nothing to get worried about.
Asad Farid, an economist, said high demand of dollar for import payments was also one of the reasons. He added the critical situation of the country, both due to floods as well as law and order, was also pressurising the rupee. One banker predicted the rupee will hit 85.90 to the dollar on Tuesday. Previously, the rupee fell to a record low of 85.75/80 on July 13 amid high dollar demand from importers as well as debt repayments.
In the money market, overnight rates rose to 12.90 per cent, compared to Friday’s close of 12.40 per cent amid tight liquidity in the market.
Published in The Express Tribune, August 3rd, 2010.