KARACHI, Sept 22: The rupee traded at record lows on Monday following a suicide attack that killed 53 people in the capital on Saturday and dealers said the outlook was bleak due to economic and security worries.

Dealers said tension between Pakistan and the United States over military action against militants on Pakistani territory added to concerns.

Dealers said the rupee was traded at Rs78.55 to the dollar and closed at Rs78.21/28. It closed at Rs78.15/25 on Saturday.

“Saturday’s incident has reinforced people’s views which have been negative for a while,” said a currency dealer referring to the Islamabad bombing.

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.

“Dollar outflows are giving us a huge bleeding,” said the currency dealer. The outlook for the currency was bleak with inflation at more than 25 per cent, a widening current account deficit and depleting foreign reserves, dealers said. The rupee has lost 21.2 per cent against the dollar this year.

Dealers said the current account and trade deficit numbers for August were alarming and should lead to calls for action from regulators and policy-makers for emergency funding, curtailing imports and restoring confidence.—Reuters