Currency: Rupee weakens against dollar

KARACHI: The rupee ended weaker at 90.85/95 to the dollar, compared with Friday’s close of 90.77/83, because of higher import payments, especially for oil. International oil prices rose on Monday as Iran halted exports to British and French companies ahead of a European Union embargo. The rupee is likely to stay under pressure and the State Bank this month cautioned it would be a challenge to finance the projected current account deficit. The central bank’s latest monetary policy announcement kept the key policy rate flat at 12 per cent for the next two months. The IMF in February projected a widening of Pakistan’s budget deficit to 7 per cent of gross domestic product, compared with the government’s revised budget target of 4.7 per cent. In the money market, overnight rates ended lower at between 10.75 per cent and 11.25 per cent, compared with Friday’s close of 11.90 per cent, after scheduled inflows of 18 billion rupees.

Published in The Express Tribune, February 21^st, 2012.