Currency: Rupee weakens, overnight rates lower

The rupee ended weaker on Friday at 85.86/91 to the dollar following an increase in international oil prices.

KARACHI: The rupee ended weaker at 85.86/91 to the dollar, compared with Thursday’s close of 85.71/76, following an increase in international oil prices.

Oil hovered around its highest levels in more than two years on Friday, supported by cold weather across the globe, appetite for risk assets and no signals from OPEC it was prepared to arrest the rally. London Brent North Sea crude for February delivery soared to $94.74 dollars per barrel, the highest point since October.

In the money market, overnight rates ended at between 13 and 13.50 per cent, compared to Thursday’s close of 13.90 per cent despite a six-day repo by the central bank in which it mopped up Rs22 billion ($253 million). Next inflows are scheduled for Monday amounting to Rs6.2 billion ($72.2 million).

Published in The Express Tribune, December 25^th, 2010.