KARACHI, Sept 19: Rupee weakened to a new record low against the dollar on Friday because of weak economic fundamentals and the global financial crisis, dealers said.

They said the rupee was traded at 78.15 rupees to the dollar and was quoted at 78.00/10 at 12pm. The previous record low was 77.80, in early trade on Friday. It closed at 77.65/75 on Thursday.

Dealers also said the market was short of dollars because of the central bank’s buy/swap operations.

The central bank has been buying dollars in the ready market with a simultaneous commitment to sell them back in future, they said.

“There are usually a few import payments around this time,” said a currency dealer.

“But the outlook remains bleak as there are no inflows and a shortage of supply of dollars.” The market was apprehensive about a lack of inflows from lenders, while dwindling foreign currency reserves limited the scope for central bank intervention.

The rupee lost 21 per cent against the dollar this year, largely because of a deteriorating balance-of-payments position.

Data released on Thursday showed total foreign currency reserves had fallen to $8.91 billion in the week ending on Sept 13, down $190 million from the previous week.

The SBP said its reserves fell to $5.52 billion from $5.72 billion previously, while those held by commercial banks rose marginally to $3.39 from $3.38 billion.

Pakistan’s foreign reserves hit a record high of $16.5 billion in October last year but have been drained by a soaring oil import bill, and foreign investors withdrawing money because of political uncertainty.

The current account deficit widened sharply to $2.572bn in July and August, the first two months of the 2008/09, which is equivalent to about 1.6 per cent of GDP, compared with a full-year target of 6.0pc of GDP.—Reuters