KARACHI, March 5 The Pakistani rupee ended
firmer on Monday amid a lack of import payments, but dealers
expect it to come under pressure following an increase in
international oil prices.
The rupee closed at 90.85/90 to the dollar, compared to its
close on Friday of 90.98/91.04.
"Import payments are likely to increase because of higher
global oil prices and ... we may see the rupee weaken further in
the coming days," said a bank dealer.
Oil was trading at around $123 a barrel on Monday.
The rupee touched a record low of 91.28 to the dollar in
January, pressured by concerns about higher payments for oil
imports and Pakistan's overall economic health.
The State Bank of Pakistan warned last month that financing
the country's projected current account deficit would be a
The current account recorded a provisional deficit of $2.633
billion in the first seven months of the 2011/12 fiscal year,
compared with a $96 million deficit in the same period last
year, according to central bank data.
The deficit is expected to widen further in the coming
months because of debt repayments and a lack of external aid.
Islamabad started repaying an $8 billion International
Monetary Fund (IMF) loan last month with a $399 million payment.
Dealers said they were also cautious after the IMF advised
Pakistan to take immediate steps to tackle growing budget
pressures and raise interest rates to contain inflation.
The central bank kept the key policy rate flat at 12 percent
for the next two months in its monetary policy announcement in
The IMF last month projected a widening of Pakistan's budget
deficit in the 2011/12 fiscal year to 7 percent of gross
domestic product, compared with the government's revised budget
target of 4.7 percent.
Pakistani stocks, led by middle tier shares ended 1.45
percent higher on Monday.
The Karachi Stock Exchange (KSE) benchmark 100-share
index rose 189.34 points, higher at 13,278.31 points.
Turnover rose to 295.14 million shares, compared with 253
million shares traded on Friday.
Volume leader Jahangir Siddiqui financial group
ended 10.67 percent higher at 10.37 rupees, Bank Alfalah
closed up 6.88 percent at 15.53 rupees, and Arif Habib
Corp gained 3.33 percent to end at 32 rupees.
In the money market, overnight rates were unchanged at their
top level of 11.90 percent amid tight liquidity in the interbank
(Reporting by Sahar Ahmed; Editing by Qasim Nauman and Chris