Currency: Rupee slips against dollar

KARACHI: The rupee ended weaker at 90.80/83 to the dollar, compared with Wednesday’s close of 90.75/79 due to an increase in import payments. Dealers expect pressure on the local unit to continue due to rising international oil prices, which rose to a nine-month high above $124 per barrel on Thursday. A $399 million repayment of an International Monetary Fund (IMF) loan is also due on Friday. Dealers said they were also cautious after the IMF advised Pakistan to take immediate steps to tackle growing budget pressures and raise interest rates to contain inflation. The central bank has kept the key policy rate flat at 12 per cent for the next two months in its monetary policy announcement. In the money market, overnight rates fell to 9 per cent, compared with Wednesday’s close of 11.90 per cent amid increased liquidity in the interbank market. Dealers said there were scheduled inflows of 36 billion rupees ($396.52 million), against outflows of 6 billion rupees.

Published in The Express Tribune, February 24^th, 2012.