May 04, 2008	Sunday	Rabi-us-Sani 27, 1429

KARACHI, May 3: The rupee fell on Saturday to a new record low and dealers said it might fall further due to high demand for the dollar from importers and on concerns about the economic outlook.

The rupee weakened beyond 65 rupees to the dollar for the first time to close at 65.12/14 to the dollar, down from Friday’s close of 64.90/95.

“There are outflows related to the current account, particularly the high import bill and, of course, in that oil is a major contributing factor,” said a dealer at a local bank.

The rupee has been under pressure due to increased demand for dollars from importers, particularly for oil payments, amid rising international oil prices, dealers said.

They said there was speculation that the State Bank of Pakistan, which closely watches the exchange rate, may consider aggressive monetary tightening to curb import demand before its next scheduled monetary policy review in July.—Reuters