Business | Markets
Pakistani rupee falls by 1.7%
The Pakistani rupee weakened 1.7 per cent yesterday to a record low of 82.07 to the dollar because of pressure from import payments and a weak economic outlook, dealers said.
- Reuters
- Published: 23:47 October 16, 2008
Karachi: The Pakistani rupee weakened 1.7 per cent yesterday to a record low of 82.07 to the dollar because of pressure from import payments and a weak economic outlook, dealers said.
The rupee was quoted closing at 82.05/10 to the dollar. It closed at 80.65/85 on Wednesday.
"There is now panic in the market and a shortage of dollars," said a currency dealer.
The rupee has lost 24.9 per cent against the dollar since the beginning of the year. Dealers said the global financial crisis had contributed to the weakening of the rupee.
Crisis
Pakistan is facing a balance of payments crisis, inflation running at close to 25 per cent and heavy government borrowing from the central bank to cover a budget deficit.
Foreign exchange reserves have gone down sharply in recent months and were at $8.32 billion in the week that ended on October 4. Reserves were at an all-time high of $16.5 billion in October last year.
Analysts believe the central bank's reserves are barely enough to cover two months of imports. Pakistan is spending about $1 billion a month on imports and debt payments.
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