Rupee loses against dollar; O/n rates up

KARACHI: The rupee Monday ended weaker at 90.70/75 to the dollar, compared with Friday's close of 90.65/70.

Friday's monetary policy statement the central bank said the external sector is likely to remain under pressure because of both external debt payments and a lack of foreign aid.

Pakistan's current account deficit widened to $2.95 billion in the first eight months of the 2011/12 fiscal year, compared with $194 million over the same period the previous year.

The current account deficit in February was $260 million, compared with a deficit of $98 million in February 2011. The deficit stood at $364 million in January 2012.

"We expect the fiscal year 2011/12 current account deficit to widen to $4.6bn (2 percent of GDP), with higher debt payments adding to pressure on the rupee," said Ali from SCB.

"We forecast that it will weaken further to 92 by June and 96 by December 2012, adding to inflation risks."

Overnight rates in the money market rose to end between 11.75 percent and 11.90 percent, compared with Friday's close of between 10.50 percent and 11 percent, amid tight liquidity in the interbank market. (Reuters)