Rupee slide continues

Saturday, January 09, 2010
KARACHI: The Pakistani rupee fell to a new low on Friday for the fifth consecutive day because of high demand for dollars to pay for imports.

The rupee was quoted closing at 84.95/85.02 to the dollar compared with Thursday’s close of 84.79/85.

“The weakest trade for the rupee was made at 84.90,” said a currency dealer in Karachi.

That compared with the previous record low of 84.88 the previous day.

However, in the one-day forward market, dealers said it traded at 85.07 to the dollar.

Dealers said they expected the rupee to ease to more than 85 to the dollar in the ready market in coming days. The rupee fell 6.17 per cent last year after a 22.12 per cent fall in 2008.

“The rupee has been under pressure since the central bank stopped providing dollars to pay for crude oil,” said another currency dealer.

Demand for dollars to pay for oil has increased since last month when the central bank ordered commercial banks to provide foreign currency for imports of crude oil, as part of Pakistan’s commitments under an International Monetary Fund (IMF) programme. Previously, the central bank had provided dollars for crude oil imports.