News Rupee at record low to dollar for 2nd day

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Mar 5, 2010
KARACHI: The rupee traded at a record low of 90.42 on Thursday for the second consecutive trading session amid increased import payments, especially of oil, and because of a negative outlook on the country's economy, dealers said.

"There are some oil import payments but there are few inflows of dollars and generally there is rising concern about the direction of Pakistan's economy," said a bank dealer.

The rupee traded at its previous record low of 90.35 to the dollar on Wednesday and dealers said it traded at 90.48 in the TOM (one-day forward) market.

The rupee ended at 90.40/45 to the dollar, compared with Wednesday's close of 90.27/31.

There are concerns on the economic front as the country's current account deficit stood at $2.104 billion in July-Nov compared with $589 million in the same period a year earlier.

The deficit is likely to widen further in the coming months because of debt repayments and a lack of external aid.

Islamabad has to start paying back an $8 billion International Monetary Fund loan in early 2012. Without additional sources of revenue, analysts said, its foreign exchange reserves may come under pressure.

More than $1.1 billion is due in the second half of the 2011/12 fiscal year.

Foreign exchange reserves were at $16.77 billion in the week ending Dec. 23, compared with a record $18.31 billion as of July 30.

The rupee weakened 4.82 percent in 2011, after losing 1.53 percent in 2010.

There are also concerns about rising international oil prices as it was trading around $113.40 a barrel but the risk remained to the upside given geopolitical tensions around Iran and Syria, and calls for strikes in Africa's biggest producer Nigeria.

Pakistan stocks fell on foreign selling. The Karachi Stock Exchange's (KSE) benchmark 100-share index ended 1.53 percent, or 174.09 points, lower at 11,187.88 on turnover of just 29.64 million shares.

In the money market, overnight rates ended at their lowest level of 9.10 percent, unchanged from Wednesday's close amid increased liquidity in the interbank market.

Dealers said there were scheduled outflows of 174 billion Pakistani rupees ($1.93 billion) due on Friday. (Reuters)