Rupee weakens to fresh record low

KARACHI: The rupee dropped to a new all-time low on Wednesday amid higher import payments and worries about the outlook for the country’s external sector, dealers said.

The rupee closed at 177.43 to the dollar, falling further from its previous record low of 176.79 hit on Tuesday. It depreciated by 0.36 percent during the session. The local unit has weakened 11.21 percent so far this fiscal year.

“The demand was high from importers, while supplies were not enough to meet that demand,” said a foreign exchange dealer.

“Exporters are sidelined in anticipation of further depreciation in the currency in the days ahead, which reduced supplies.”

Dealers said the rupee remains under pressure as it is hit by concerns about trade and current account deficits and external factors such as rising oil prices.

The underlying factors are not seen as supportive for the rupee. However, the State Bank of Pakistan’s weekly forex data on Thursday and the remittances and the balance of payments numbers in the mid of this month will likely determine the rupee’s near-term direction, according to dealers.

Analysts expect the current account deficit for the month of November to be clocked in at $2.25-2.50 billion. The deficit stood at $1.66 billion in October, compared with $1.13 billion in the previous month.

In the open market, the rupee traded lower at 179.5 against the dollar. It traded at 178.80 in the previous session.