0
KARACHI: The Pakistani rupee weakened on Monday amid increased payments for imports and dealers expect the pressure to continue because of a widening current account deficit.
The rupee ended at 87.39/44 to the dollar, weaker than Friday's close of 87.20/30. The rupee hit a record low of 90.03 last week.
“The economic outlook for the country still remains bleak and therefore the rupee is likely to steadily depreciate,” said a bank dealer.
The country's current account deficit stood at $2.104 billion in July-Nov compared with $589 million in the same period a year earlier.
The deficit is likely to widen further in coming months because of debt repayments and a lack of external aid.
Islamabad has to begin repayments on an $8 billion IMF loan in early 2012, and without additional sources of revenue, its foreign exchange reserves may come under pressure, analysts said.
It has to make a repayment of more than $1.1 billion in the second half of 2011/12 fiscal year.
Foreign exchange reserves were at $16.66 billion in the week ending December 16, compared with a record $18.31 billion as of July 30.
Dealers said Pakistan and China signing a bilateral currency swap agreement on Friday slightly improved the sentiment.
Pakistan and China on Friday signed a bilateral currency swap agreement to promote trade between the two countries and also further strengthening their economic ties, Pakistan's central bank said in a statement.
The bilateral currency swap agreement is of 10 billion yuan Chinese yuan ($1.58 billion) 140 billion Pakistani rupees ($1.57 billion)and would end in three years.
Meanwhile, stocks ended flat in a lacklustre market and volume fell to a 16-month low amid lack of any positive triggers, dealers said.
The Karachi Stock Exchange's (KSE) benchmark 100-share index ended 0.08 per cent, or 9.26 points, higher at 11,310.35 on turnover of only 17.56 million shares.
In the money market, overnight rates rose to close at 11.90 per cent, compared with Friday's close of 11.00 per cent, amid a shortage of funds.
