KARACHI, Aug 12: The rupee fell to a record low on Tuesday, hurt by the political turmoil and ailing economy, but the State Bank of Pakistan will find it hard to defend the currency because of dwindling foreign reserves.

The rupee closed at a record low of around 73.70/80 against the US dollar, traders said.

They said the rupee was last quoted at 73.72/79 and 73.75/80. It was the second consecutive day that the rupee closed at a record low.

Some analysts said the persistent fall in the rupee was a sign of a start of a run on the currency, but the central bank would not have the money to buy and support the rupee because of shrinking foreign exchange reserves.

“There is not much they can do unless they have the reserves available,” said Asif Ali Qureshi, the research head at Invisor Securities.

“The key for the government right now is to get foreign aid,” he said.

The currency closed at 73.35/39 to the dollar on Monday, the central bank said, the lowest level since the previous all-time low set on July 8, according to records kept by Reuters.

The rupee has lost a fifth of its value against the US dollar this year and analysts and traders said the coalition government’s plan to impeach President Pervez Musharraf had added pressure.—Reuters