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Pakistan: Rupee hits all-time low of 85.78

Tuesday, 03 August 2010 13:05

Aggressive buying of dollars by importers and corporate clients resulted in the rupee value to close down at an all-time low of 85.78 against the dollar on Monday, dealers said.

“The lack of inflows in terms of home remittances and export receipts and aggressive buying of importers and corporate clients for payments jacked up the dollar to an all-time high against the local currency,” said M Mustufa Jan, Head of Forex Research at KASB Securities Pvt Limited. The rupee shed nine paisas to end at 85.78 to a dollar in the inter-bank market from Friday’s close of 85.69. The rupee devaluation started late last week as some big payments of oil were due. Earlier, it recorded the lowest level on July 12 when it closed at 85.77 against the foreign currency.

Dealers said that the pressure on the rupee would persist as more buying is expected in the coming days.The local currency started on the higher side at 85.75 to a dollar on high demand. The aggressive buying further depreciated the local currency as the dollar hit an intraday high of 85.79.

Experts said that the rupee witnessed decline due to the lack of inflows in the market following weekly holidays in the international market, which started week later in the day in Pakistan Standard Time (PST) due to time difference.

They said that home remittances and export receipts would provide a support level to the rupee in the coming days. The local currency closed the last fiscal year in depression as it ended on the lowest level of 85.51 on June 30.

On July 12, it was further devalued to another lowest level on huge payments for oil imports. However, following sharp fall, the rupee regained the levels of 85.51 during the last month after announcement by US Secretary of State Hillary Clinton of giving fresh aid to Pakistan’s private sector and some pledges made at the Friends of Democratic Pakistan (FoDP) meeting in July.