Currency: Rupee weakens further against dollar

KARACHI: Higher import payments following an increase in international oil prices drove the Pakistani rupee down to 90.98/91.04 to the dollar on Friday, close to its record low of 91.28 in January, dealers said. The rupee closed at 90.95/91.00 on Thursday. “There were a couple of oil payments but generally there is pressure on the rupee because of rising global oil prices and a weak current account,” said a bank dealer. International oil prices were trading below $125 a barrel on Friday but surged 5 per cent to an 11-month high a day earlier. 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. Pakistan’s current account deficit is expected to widen further in the coming months because of debt repayments and a lack of external aid. In the money market, overnight rates were unchanged at its top level of 11.90 per cent amid increased liquidity in the interbank market.

Published in The Express Tribune, March 3^rd, 2012.