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KARACHI: Higher import payments following an increase in international oil prices drove the Pakistani rupee down to 90.98/91.04 to the dollar on Friday, close to its record low of 91.28 in January, dealers said.
The rupee closed at 90.95/91.00 on Thursday.
“There were a couple of oil payments but generally there is pressure on the rupee because of rising global oil prices and a weak current account,” said a bank dealer.
International oil prices were trading below $125 a barrel on Friday but surged 5 per cent to an 11-month high a day earlier.
The rupee touched a record low of 91.28 to the dollar in January, pressured by worries about higher payments for oil imports and the country’s overall economic health.
Islamabad started repaying an $8 billion International Monetary Fund (IMF) loan last week with a $399 million payment.
The State Bank of Pakistan cautioned last month that financing the country’s projected current account deficit would be a challenge.
The deficit is expected to widen further in the coming months because of debt repayments and a lack of external aid.
The current account recorded a provisional deficit of $2.633 billion in the first seven months of the 2011/12 fiscal year, compared with a deficit of $96 million in the same period last year, according to data from the State Bank of Pakistan.
Dealers said they were also cautious after the IMF advised Pakistan to take immediate steps to tackle growing budget pressures and raise interest rates to contain inflation.
The central bank kept the key policy rate flat at 12 per cent for the next two months in its monetary policy announcement in February.
The IMF in February projected a widening of Pakistan’s budget deficit in the 2011/12 fiscal year to 7 per cent of gross domestic product, compared with the government’s revised budget target of 4.7 per cent.
In the money market, overnight rates were unchanged at its top level of 11.90 per cent amid increased liquidity in the interbank market.
