rupee sinks to fresh two year low against dollar

KARACHI: The Pakistani rupee on Wednesday slipped to a fresh two-year low of 105.80 against the US dollar in the interbank market, falling 56 paisa from its previous closing. In the open market, the rupee was down 30 paisa from Tuesday’s closing, trading at 105.60 against the USD. Due to the rise in the value of the dollar by Rs 1.40 in the last two days, Pakistan’s external debt is likely to see an increase of Rs 84 billion, analysts said. The recent climb of the dollar against the rupee has been attributed to a strong demand of the greenback from importers and its outflows from the country. Currency dealers say the growing demand is due to oil-related payments.”There were a few import payments in the market and banks were already short of them, and as the rupee crossed the 104.50 level it triggered ‘stop’, surging the rupee past the 105 figure,” Eman Khan from Tresmark, an application that tracks financial markets, told The News on Tuesday. “It’s no coincidence that it happened on a day when the Finance minister initiated meeting with the IMF (International Monetary Fund) and also when economic managers are assessing the damage from the deadly earthquake,” Khan said. The talks between the IMF officials and the Pakistan’s authorities on the ninth review of the extended fund facility program started on Monday in Dubai. Despite strong foreign exchange reserves and narrowing current account deficit, the rupee is constantly losing its value. The rupee depreciated 3.5 percent since the beginning of the current fiscal year.