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Pakistani rupee at record low; stocks end up
Reuters - Tuesday, September 28
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KARACHI, Sept 27 - The Pakistani rupee fell to a record low on Monday because of increased dollar demand for import payments.
A currency dealer said the rupee traded as low as 86.07, beating the previous record low on Sept 24 of 86.03.
The rupee ended at 86.10/14 to the dollar, compared with Friday's close of 86.04/09.
Dealers expect the local unit to weaken further.
"The rupee is traded at 86.12 in TOM market," said another dealer.
The rupee has lost 0.9 percent this year, after falling 6.17 percent in 2009.
Stocks ended higher on renewed foreign interest in middle-tier shares despite political uncertainty.
The Karachi Stock Exchange's benchmark 100-share index <.KSE> ended 0.28 percent, or 27.35 points, higher at 9,936.79.
Turnover was 69 million shares, compared with 48.57 million shares on Friday.
"Renewed foreign interest played as a catalyst in the positive activity in the market," said Ahsan Mehanti, director at Arif Habib Investments Ltd.
Dealers said that investors were still on the sidelines as they wait for the monetary policy announcement and ride out political uncertainty.
The monetary policy for the subsequent two months is due to be announced on Sept. 29. The central bank raised its key policy rate by 50 basis points to 13 percent in July.
A Reuters poll found six out of 10 analysts expected the central bank to keep its policy rate unchanged at 13 percent when it sets monetary policy for the next two months.
They predict the central bank will wait for the mid-October release of an assessment of the damage from devastating floods which began in late July.
The remaining four analysts expect a rise in the policy rate because the risk of inflation is increasing and government expenditure will rise because of flood relief, rehabilitation and reconstruction.
There is also political uncertainty as media speculation has been swirling that the army would take action against the government if it fails to lead effectively.
In the money market, overnight rates ended flat at 10 percent, unchanged from Friday's close and dealers said the next inflow amounting to 8 billion Pakistani rupees ($93 million) were scheduled for Friday.
(For more Reuters coverage of Pakistan, see: http://www.reuters.com/places/pakistan)
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