Rupee hits record low, then strengthens

KARACHI: The rupee hit a fresh record low of 87.53 to the dollar on Thursday due to increased import payments and on negative sentiment about the country’s economic outlook but closed firmer as some support came in around 87.50 for the local unit.
The rupee closed at 87.42/48 to the dollar, compared with Wednesday’s close of 87.47/52 and dealers expect the pressure to remain on the currency in the short to medium term.
“The rupee’s weakest traded level was 87.53 per dollar, but some support was seen around 87.50,” said a dealer at a local bank.
“However, there still is pressure on the rupee and it is likely to weaken further.”
The rupee hit a previous record intra-day low of 87.50 on Wednesday.
Though there are some inflows, especially of remittances from Pakistanis working overseas, dealers said the gloomy outlook of Pakistan’s economy was affecting the local unit.
Stalled payments from a bailout programme by the International Monetary Fund (IMF) are also hammering the rupee.
The IMF has criticised the Pakistan government for its patchy implementation of fiscal reforms and has held back the sixth tranche of an 11 billion bailout programme since August last year and Pakistan is due to start repaying the loan and its interest from early next year.
IMF and Pakistan officials were due to meet in July, but the meeting was delayed and no new date announced.