Pakistani rupee flat; stocks, o/n rates end lower | Reuters
Dec 13 (Reuters) - The Pakistani rupee ended almost flat on Tuesday and dealers expect the pressure on the local unit to ease in the short term because of increased remittances from Pakistanis living abroad, dealers said.
However stocks ended lower as a U.S Congressional panel froze $700 million in aid to Pakistan until it gives assurances it is helping fight the spread of homemade bombs in the region.
The rupee ended at 89.10/20 to the dollar, compared with Monday's close of 89.10/15.
It dropped to a record low of 89.45 on Wednesday.
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The rupee in the short term may stabilise but in the medium term we are likely to see a slow depreciation because of a bleak outlook for the economy," said a bank dealer.
Remittances from Pakistanis working abroad rose 18.33 percent to $5.24 billion in the first five months of the 2011/12 fiscal year, compared with $4.43 billion in the same period last year.
However in November $924.92 million was sent home by overseas Pakistanis, compared with $926.89 million in November last year.
Pakistan's bleak economic outlook could further punish the rupee in the medium term.
The International Monetary Fund forecasts economic growth for the 2011/12 fiscal year at 3.5 percent, lower than the government's target of 4.2 percent.
Pakistan's current account deficit stood at $1.6 billion in July-Oct compared with $541 million in the same period a year earlier.
Islamabad has to start repaying an $8 billion IMF loan in early 2012, and without additional sources of revenue, its foreign exchange reserves may come under pressure, analysts say.
Foreign exchange reserves fell to $16.68 billion in the week ending Dec. 2. They hit a record $18.31 billion in the week ended July 30.
The Karachi Stock Exchange's (KSE) benchmark 100-share index ended 1.73 percent, or 199.10 points, lower at 11,278.02 on turnover of 41.08 million shares.
"Selling was witnessed in stocks across the board at KSE after reports that leaders of U.S. Senate agreed to freeze $700m in U.S. aid to Pakistan," said Ahsan Mehanti, director at Arif Habib Investment Ltd.
In the money market, overnight rates closed lower at 9 percent, compared with Monday's close of between 9.50 percent and 10 percent amid increased liquidity in the interbank market. (Reporting by Sahar Ahmed; Editing by Ruth Pitchford)
