Rupee may remain under pressure

The rupee is likely to remain under pressure against the dollar next week, owing to scheduled foreign repayments and weak fiscal conditions, analysts said on Saturday.

The rupee witnessed sharp decline of 5.3 percent on July 16 to reach the record level of Rs128 against the greenback.

The analysts said the local unit would further devalue to a level of Rs135 or so.

The current account deficit of the country swelled to $18 billion, or 5.7 percent, of the GDP.

The trade deficit ballooned 15.87 percent to $37.64 billion, mainly contributed by record imports of $60.86 billion in the fiscal year 2017/18.

The analysts said high import payments demand deteriorated the rupee value and the exports had not exhibited as per the expectations.

An analyst at Arif Habib Limited said that due to low level of import cover of around two months, Pakistan did not have an option to further run down its reserves.

In order to sustain economic activity, Pakistan will need a major chunk of foreign inflows and the International Monetary Fund (IMF) could be a potential financier,

besides friendly countries such as China, the analyst added.

The market is expecting more devaluation of the rupee of around 11 percent during the current fiscal year, the analyst said.