Rupee hits record low at 87.36 against dollar

KARACHI: The rupee hit a record low on Tuesday amid increased payments for imports and gloomy sentiment surrounding the country's economic and political outlook.

It was the third trading day in a row the local currency took a beating, and dealers expect downward pressure to continue.

The rupee closed at 87.22/27 to the dollar, compared with Monday's close of 87.15/20.

"During the day, the rupee was traded at 87.36 to the dollar as there were three, four oil payments," said a dealer at a local bank. The figure compares with the previous record low of 87.23 made on Monday.

Stalled payments from a bailout programme by the International Monetary Fund (IMF) are also hammering the rupee.

The IMF has criticized the Pakistan government for its patchy implementation of fiscal reforms and has held back the sixth tranche of an $11 billion bailout programme since August last year.

IMF and Pakistan officials were due to meet last month, but the meeting was delayed and no new date announced.

Some support, however, could come from higher remittances from overseas Pakistanis. According to official data, remittances rose 38.57 percent to $1.1 billion in the first month of 2011/12 fiscal year, compared with $791.18 million in the same period last year.

Copyright Reuters, 2011