Updated at: 1750 PST, Friday, January 21, 2011
KARACHI: The Pakistani rupee fell on Friday as higher dollar demand from importers pushed the U.S. currency higher, despite steady inflows, dealers said.
The rupee ended at 85.80/90 to the dollar, compared with Thursday's close of 85.73/80.
"Banks were aggressively buying dollars today as there was pretty high demand from importers, particularly for oil import payments," said a dealer at a foreign bank.
Dealers said steady dollar inflows could not stop the rupee from shedding value, although they did manage to cap gains. "Exporters were in the market to sell dollars and gain advantage of the high levels, which prevented a sharper fall in the rupee," said another dealer.
Rising remittances from Pakistanis working abroad have also contributed to steady dollar supplies, dealers said.
According to official data, remittances rose 17 percent to$5.3 billion in the first six months of the fiscal year 2010/11(July-June). That has also contributed to the country's foreign exchange reserves, which reached a record $17.28 billion in the weekending Jan. 15.
The stock market, meanwhile, ended higher but down from the day's peak trade, as investors opted to sell shares before the close ahead of the weekend. The market gained earlier in the day, after Thursday's 1.3percent fall.
Dealers said this encouraged investors to grab shares at attractive levels. "Share prices looked attractive after yesterday's decline and investors benefited from the opportunity," said Omaer Sheikh, a director at brokers Crosby Markets.
However, dealers said investors opted to exercise caution and sold shares to book profits towards the end of trading.
The Karachi Stock Exchange's benchmark 100-share index ended 0.16 percent, or 20.04 points, higher at12,431.91. The index touched an intraday high of 12,571.82.
Turnover jumped to 202.6 million shares from 183.6 million on Thursday.
In the money market, overnight rates rose to close at 13.75percent from 11 percent a day earlier on outflows worth 53billion rupees ($618 million). |
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