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Pakistani rupee firms; o/n rates down; stocks flat
Reuters - Wednesday, February 3
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ISLAMABAD, Feb 2 - The Pakistani rupee firmed on Tuesday from a record low the previous day amid a lack of import payments but dealers said the rupee was expected to remain under pressure.
The rupee <PKR=> closed at 84.90/98 to the dollar compared with Monday's close of 85.01/11.
"There were hardly any payments in the market," said a dealer at a foreign bank.
"However, sentiment is still weak and payments have to be made especially for oil, therefore pressure is expected to remain on the rupee."
The rupee fell to a record intraday low of 85.15 on Monday. when dealers estimated import payments of up to $150 million were made.
The rupee had firmed in previous days because of easing payment pressure and lower international oil prices.
In the money market, short-term rates eased and dealers said they were waiting for the result of a Pakistan Investment Bond auction scheduled for Wednesday.
Overnight call rates ended at around 11.0 percent, compared with Monday's close of 12.0 percent.
The target for the PIB auction is 10 billion rupees with settlement on Thursday.
Stocks ended flat and well off an intraday high as cautious investors sold at higher levels towards the end of the session amid political uncertainty.
President Asif Ali Zardari is under pressure from a raging Taliban insurgency and the possibility that some of his aides will be prosecuted under revived corruption charges.
The Karachi Stock Exchange's benchmark 100-share index <.KSE> ended 0.04 percent, or 3.74 points, higher at 9,595.24 on turnover of 145.34 million shares. The intraday high was at 9,689.31 points.
"Near the close, investors preferred to sell their shares due to the political noise along with the deteriorating law and order situation in Karachi," said Farhan Seth, an analyst at Topline Securities Ltd.
At least 25 people have been killed in clashes between rival political activists since Friday in Pakistan's commercial hub. (For more Reuters coverage of Afghanistan and Pakistan, see: http://www.reuters.com/news/globalcoverage/afghanistanpakistan)
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