Currency: Rupee weakens against dollar

KARACHI: The rupee ended weaker at 90.70/75 to the dollar, compared with Friday’s close of 90.65/70. In Friday’s monetary policy statement the central bank said the external sector is likely to remain under pressure because of both external debt payments and a lack of foreign aid. Pakistan’s current account deficit widened to $2.95 billion in the first eight months of the 2011/12 fiscal year, compared with $194 million over the same period the previous year. “We expect the ... current account deficit to widen to $4.6bn (2% of GDP), with higher debt payments adding to pressure on the rupee,” said Ali from Standard Chartered Bank. “We forecast that it will weaken further to 92 by June and 96 by December 2012...” Overnight rates in the money market rose to end between 11.75% and 11.90%, compared with Friday’s close of between 10.50% and 11%, amid tight liquidity in the interbank market.

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