Currency: Rupee weakens against dollar

KARACHI: The Pakistani rupee ended weaker at 96.01/96.06 to the dollar, compared with Friday’s close of 95.88/95.94. The currency has remained under pressure due to debt servicing to the International Monetary Fund (IMF). Pakistan has already repaid $901.4 million out of a $7 billion IMF loan in three previous instalments. The country has to pay $3.4 billion in 2012-13, $3.43 billion in 2013-14 and $1.35 billion in 2014-15 to retire IMF’s loan. The country’s foreign exchange reserves will continue to face pressure due to debt servicing in the next three years. According to reports, a balance of payment crisis is being predicted after March 2013, as country’s forex outflows are likely to remain at $1 billion per month, which may force Pakistan to negotiate a fresh IMF programme if pressure is not arrested. Overnight rates in the money market ended at 9.25%, compared to Friday’s close of 9%.

Published in The Express Tribune, November 20^th, 2012.