KARACHI: The rupee weakened on Wednesday amid negative sentiment about the country's economic outlook and on increased payments for imports, dealers said.
The rupee ended at 89.97/90.02 to the dollar, weaker than Tuesday's close of 89.95/90.00.
"The rupee was traded at its previous record low of 90.03 (to the dollar)," said a bank dealer.
Dealers said there were concerns about the bleak outlook for the economy. The 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 coming months because of debt repayments and lack of external aid.
Islamabad has to begin repayments on an $8 billion IMF loan in early 2012 and without additional sources of revenue, its foreign exchange reserves may come under pressure, analysts said.
It has to make a repayment of more than $1.1 billion in the second half of the 2011/12 fiscal year.
Foreign exchange reserves were at $16.66 billion in the week ending Dec. 16, compared with a record $18.31 billion as of July 30.
Dealers said the signing of a bilateral currency swap agreement between Pakistan and China on Friday slightly improved sentiment.
The bilateral currency swap agreement is 10 billion yuan ($1.58 billion) for 140 billion rupees and will end in three years.
In the money market, overnight rates were flat at 9.10 percent, unchanged from the previous day's close. Dealers said they were waiting for the result of the treasury bill auction, due to be announced later in the day.
Participation in the t-bill auction was just 22 billion rupees ($244.58 million), compared with a target of 65 billion rupees ($722.62 million). (Reuters)
REUTERS
The rupee ended at 89.97/90.02 to the dollar, weaker than Tuesday's close of 89.95/90.00.
"The rupee was traded at its previous record low of 90.03 (to the dollar)," said a bank dealer.
Dealers said there were concerns about the bleak outlook for the economy. The 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 coming months because of debt repayments and lack of external aid.
Islamabad has to begin repayments on an $8 billion IMF loan in early 2012 and without additional sources of revenue, its foreign exchange reserves may come under pressure, analysts said.
It has to make a repayment of more than $1.1 billion in the second half of the 2011/12 fiscal year.
Foreign exchange reserves were at $16.66 billion in the week ending Dec. 16, compared with a record $18.31 billion as of July 30.
Dealers said the signing of a bilateral currency swap agreement between Pakistan and China on Friday slightly improved sentiment.
The bilateral currency swap agreement is 10 billion yuan ($1.58 billion) for 140 billion rupees and will end in three years.
In the money market, overnight rates were flat at 9.10 percent, unchanged from the previous day's close. Dealers said they were waiting for the result of the treasury bill auction, due to be announced later in the day.
Participation in the t-bill auction was just 22 billion rupees ($244.58 million), compared with a target of 65 billion rupees ($722.62 million). (Reuters)
REUTERS
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