Currency: Rupee strengthens against dollar

KARACHI: The rupee strengthened at 97.88/94 against the dollar, compared to Tuesday’s 98.08/13. The rally was a brief interlude in a mainly downward slide. The rupee is under pressure due to import and oil payments and may fall further due to strong demand for the dollar from importers, a dealer said. The rupee has also remained under pressure due to debt servicing to the International Monetary Fund (IMF). 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. Overnight rates in the money market ended at 9.4% compared to Tuesday’s close of 9.25%.

Published in The Express Tribune, December 19^th, 2012.