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KARACHI: The Pakistani rupee ended weaker at 90.95/91.00 to the dollar on Thursday, inching closer to its record low of 91.28 touched in January, because of higher import payments especially for oil, dealers said.
The rupee closed at 90/94/98 on Wednesday. “As international oil prices are still on the higher side, we will continue to see the rupee under pressure and it may also hit a new record low in the coming weeks,” said a dealer at a local bank.
International oil prices were trading above $123 a barrel on Thursday. 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 on Friday with a $399 million payment. The State Bank of Pakistan cautioned this 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 earlier this month.
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.
Pakistani stocks were led higher by the cement sector, dealers said. The Karachi Stock Exchange (KSE) benchmark 100-share index ended 0.49 per cent, or 63.50 points, higher at 12,941.38 points. Turnover fell to 118 million shares, compared with 206.47 million shares traded on Wednesday.
In the money market, overnight rates were unchanged at its top level of 11.90 per cent amid increased liquidity in the interbank market.
