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KARACHI, Sept 16: The rupee hit its second record low against the dollar in two days on Friday, touching 87.92 on increased import payments and pessimism about the country’s economic outlook before firming to 87.75/78 at the close.
The rupee had ended Thursday’s session at 87.61/66 after hitting its previous record low of 87.82.
“The rupee traded at 87.92 per dollar and there were import payments amounting to around $200 million,” said a currency dealer at a foreign bank.
Analysts said further weakness was likely over the current fiscal year.
“Our forecasts are for rupee to end 2011 at 89 levels and touch 92 levels by June 2012,” said Sayem Ali, economist at Standard Chartered Ltd.
Though there were some inflows especially of remittances from Pakistanis working abroad, dealers said negative sentiment about Pakistan’s economy was affecting the local unit.
According to official data, remittances rose 40.45 per cent to $1.31 billion in August, compared with $933.06 million in the same period last year.
Stalled payments from an International Monetary Fund (IMF) bailout programme are also hurting the rupee.
The IMF has criticised the Pakistan government for its patchy implementation of fiscal reforms and has held back the sixth tranche of an $11 billion loan since August last year.
Pakistan is due to start repaying the loan and its interest from early next year.
IMF and Pakistan officials were due to meet in July, but the talks were delayed and no new date announced. However they are scheduled to meet next week for the annual World Bank-IMF meetings in Washington.
In the money market, overnight rates ended between 13.0 per cent and 13.25 per cent, compared with the previous day’s close of 13.40 per cent amid increased liquidity in the interbank market.—Reuters
