KARACHI, Sept 3: The rupee hit an all-time low against the dollar on Wednesday eroding the hope that higher inflows of greenback during Ramazan will give some strenght to the local currency.

The dollar touched Rs77.30 during the trading but closed at Rs76.98. Dealers said the rush for dollars forced the rupee to shed more weight and touched an all time low level.

The rupee has been under pressure since October 2007 as the foreign exchange reserves started falling with the flight of foreign investment from the shares market.

Currency dealers said they were expecting some appreciation of rupee against the US currency in the wake of higher inflows of dollars during the month of Ramazan.

They said traditionally remittances increase during this holy month as the workers used to send higher amount of money ahead of Eid al Fitr.

However, the other reason for this record fall of rupee was the failure of the governmnet, which could not arrange dollars to meet the rising trade deficit.

Pressure on rupee is mounting with the depletion of reserves of the coutnry, which fell to $9.4 billion. The deteriorating balance of payment position is emerging as the most serious problem forcing the country to adopt the IMF prescription.

Analysts believe that the downward trend of rupee could continue unless some significant inflows improve the balance of payment.

They feel that only option to support rupee is to seek IMF help, which can bring correction in imbalances of the economy.

However, some analysts believe that the government would succeed in getting Saudi help for deferred payment of oil.

“The country has lost hope of recovery of economy without foreign help,” said an analyst.

So far all claims and efforts to bring dollars in the country have failed. Once again the government has claimed to arrange $3.5 billion but the market punters were not ready to accept this claim.

Despite frequent statements that an effort was underway to get $5.9 billion oil facility from Saudi Arabia, but nothing tangible appeared as yet.

Currency dealers were seen asking each other about the fate of the local currency. They were unable to predict the minimum price of rupee against the dollar and other major currencies.

The State Bank has taken all possible steps to bring in export proceeds, while it tried to minimise the role of speculative forces in the currency market but the falling reserves provide space for the speculations.