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KARACHI: Import payments and negative regional sentiment on currencies drove the rupee to close near its record low on Friday, dealers said.

The rupee ended at 87.75/80 to the dollar, weaker than Thursday's close of 87.64/67, but still shy of its record low of 87.92 in September.
However in the TOM (one-day forward) market, it traded at 87.95 according to dealers.

"Next week there are fewer payments so the pressure may ease, however there is generally a weak sentiment about the economy," said a dealer at a foreign bank.

Pakistan's foreign exchange reserves fell to $16.96 billion in the week ending Nov. 18, after hitting a record $18.31 billion in the week ending July 30.

There was also some concern following the International Monetary Fund's (IMF) assessment that the outlook for Pakistan's economy for the current fiscal year ending June 2012 was "challenging", dealers said.

In a statement on Tuesday, the IMF said that ongoing security concerns were likely to limit capital inflows.

Dealers said the rupee was under pressure despite rising remittances from overseas Pakistanis, which rose to $1.02 billion in October, compared with $855.11 million in October 2010.

The local currency could also experience downward pressure in the days ahead due to a widening current account deficit, which stood at a provisional $1.5 billion in the July-Oct period, compared with $541 million in the same period last year.

In the money market, overnight rate ended at its top level of 11.90 percent, amid tight liquidity in the interbank market. (Reuters)

 



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