Rupee ends at yet another low, closes at 87.47/52, stock flat

The rupee closed at 87.47/52 to the dollar, compared with Tuesday's close of 87.41/46 and dealers expect the pressure to remain on the currency in the short to medium term.

"The rupee's weakest traded level for today was 87.50 per dollar, but it traded even weaker in the TOM (one-day forward) market," said a dealer at a local bank.

The rupee hit a record low intra-day low of 87.50 on Tuesday, and again on Wednesday.

Dealers said the rupee could hit 87.60/65 to the dollar this week.

Though there are some inflows, especially of remittances from Pakistanis working overseas, dealers said the gloomy outlook of Pakistan's economy was affecting the local unit.

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 and Pakistan is due to start repaying the loan and its interest from early next year.

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

Meanwhile, the stock market ended almost flat as investors booked profit at higher levels after the market rose 1.4 percent the previous day, dealers said.

The KSE benchmark 100-share index closed 0.09 percent, or 10.62 points, higher at 11,329.77.

Volume was 86.23 million shares, compared with 87 million shares traded on Tuesday.

"After two days of bullish momentum, the market took a breather to close in a narrow positive territory," said Mohammed Rizwan, a senior dealer at Topline Securities Ltd.

In the money market, overnight rates ended flat at 13.40 percent, and dealers said they were awaiting the result of the fortnightly treasury bills auction due to be announced later in the day.

Dealers expect cut-off yields to remain largely unchanged.

Copyright Reuters, 2011