Currency: Rupee falls against dollar

KARACHI: In the currency market, the Pakistani rupee fell to 97.15/25 against the dollar, compared to Monday’s 96.91/95. The local currency may fall further due to high dollar demand from importers, a dealer said. The currency has remained under pressure due to debt servicing to the International Monetary Fund (IMF). Pakistan recently repaid $394.3 million on an IMF Stand-By Arrangement loan. 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 the 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 for a fresh IMF programme if pressure is not arrested. Overnight rates in the money market remained flat at 9%.

Published in The Express Tribune, December 12^th, 2012.