07 October 2004	Thursday	21 Shaban 1425

KARACHI, Oct 6: The rupee that lost five paisa to a US dollar in the inter-bank market on Tuesday lost six paisa more on Wednesday to close at 59.36 a dollar.

Bankers said the local currency was down due to aggressive dollar buying by a big local bank on behalf of its customers.

The Tuesday loss of five paisa in the rupee value has weakened it by 11 paisa against the US dollar so far during this month. Senior bankers say that dollar buying pressure may continue in the days to come as importers' demand is rising constantly primarily due to soaring international oil prices.

On Monday, the price of US crude oil shot up to $51.25 a barrel and that of the UK crude reached a record high of $47.40 a barrel for November deliveries. Oil market experts do not see a big and immediate decline in oil prices, which means oil importing countries, including Pakistan, will see their import bills rising in the months to come.

Pakistan's imports rose by 27.7 per cent to $1.376 billion in September 2004 primarily due to high oil prices whereas exports rose by only 6.7 per cent to $1.108 billion. Thus, the country saw a trade deficit of $268 million.

This had a bad impact on the health of the rupee that lost 49 paisa or more than 0.8 per cent of its value against the US dollar. In July-September 2004, the rupee lost 112 paisa or more than 1.9 per cent value against the dollar as the trade deficit totalled $839 million.

Senior bankers say the gap between trade-related inflow and outflow of foreign exchange continues to widen during the current month, which suggests that the trade deficit for October will be even higher and the rupee will weaken further unless the SBP supports it.