Pakistan Re plummets further

KARACHI, July 11: The Pakistan rupee ended 1.0 down at 60 to the dollar in the kerb on Saturday on concerns about the country's economy in t...

KARACHI, July 11: The Pakistan rupee ended 1.0 down at 60 to the dollar in the kerb on Saturday on concerns about the country’s economy in the wake of international sanctions for its nuclear tests, dealers said. Dealers said uncertainty grips the market amid reports that the country could seek a moratorium on its external debt worth $ 30 billion.

They said all the major currencies had gained sharply against the rupee after recent curbs on foreign exchange transactions and speculation, denied by the government, that the local unit would be devalued for the second time since June.

Dealer Owais Kalia said the difference between the rupee’s official exchange rate against the dollar and the open market was almost 35 per cent. "The rupee recovered some lost ground after slumping to 64 rupees to a dollar as some deals were done at 60 Rupees towards the end," he said. "But in the evening deals, the rupee is again under pressure."

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The central bank adjusted the rupee down to 46.00/46.46 to the dollar on June 27from 44.0500/44.4905 fixed on March 24 last. "People have to tighten their belts to face difficulties and challenges," Sharif told newsmen here as the Pakistani rupee collapsed to an all-time low of 60 to a dollar in the open market and banks refused to accept letters of credit of Pakistani importers.

"Its not the end of the world …. There is no need to worry and fear," he said after inaugurating a national population convention here.

Sharif’s comments came after Pakistan’s Central Bank, State Bank of Pakistan, announced several measures to conserve its fast depleting foreign exchange reserves including asking foreign travellers to buy foreign exchange from open market and stopping banks from making payments to suppliers credit.

The moves came after negotiations with the International Monetary Fund (IMF) indicated that the $ 1.56 billion soft loan promised to Pakistan may get blocked in view of the sanctions imposed on the country after the nuclear blasts.