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KARACHI: The Pakistani rupee posted gains on Tuesday after falling to a record low a day earlier, as dollar supplies exceeded demand from importers, dealers said.
The rupee ended at 90.00/05 to the dollar, up sharply from 90.75/80 on Monday. The rupee fell to a record low of 91.28 to the dollar in intra-day trade on Monday.
“There were much fewer import payments today, while the dollar supply was also good, and hence the rupee gained,” said a dealer at a local bank.
Another dealer at a foreign bank suspected that inflows of the US currency may have also improved because of dollar selling by the central bank in the interbank market.
However, despite Tuesday's recovery, the rupee is likely to remain week in the weeks ahead, dealers said.
The rupee lost 4.82 per cent in 2011 after falling 1.53 per cent in 2010.
Analysts say concerns about the country's economic stability, especially a weakening current account, are adding to the pressure on the rupee.
Pakistan'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 the coming months because of debt repayments and a lack of external aid.
Islamabad has to start paying back an $8 billion International Monetary Fund loan in early 2012, and more than $1.1 billion is due in the second half of the 2011/12 fiscal year (July-June).
Without additional sources of revenue, Pakistan's foreign exchange reserves may also come under pressure, analysts said.
These reserves were at $16.77 billion in the week ending Dec. 23, compared with a record $18.31 billion as of July 30.
Meanwhile, stocks fell on as investors remain concerned about the possibility of a Supreme Court action against the government in a case related to a controversial law that gave amnesty to politicians and bureaucrats accused of corruption, embezzlement, money laundering, murder, and terrorism between 1986 and 1999.
The National Reconciliation Ordinance, or NRO, issued by former president Pervez Musharraf in 2007, was declared unconstitutional by the Supreme Court of Pakistan in 2009.
The Karachi Stock Exchange's benchmark 100-share index ended 0.97 per cent, or 107.12 points, lower at 10,933.18 on turnover of 43.52 million shares.
In the money market, overnight rates ended at 10.25-10.75 per cent, down from 11.90 per cent on Monday, after the State Bank of Pakistan injected 41.40 billion rupees in the market through open market operations.
