Pakistan rupee hits record low, row with U.S. weighs

KARACHI-The Pakistani rupee weakened on Wednesday due to import payments, weak economic fundamentals and concern over tension with the United States over U.S. military attacks on militants in Pakistan.The rupee traded at a record low of 77.65 early in the session compared with a previous low of 77.45 set on September 3.However, it steadied and dealers said it closed at 77.18/23 to the dollar compared with Tuesday's closing of 76.90/77.00.Dealers said there was suspicion that the central bank had intervened selling dollars to help the rupee, having earlier left the market short of dollars because of its buy/swap operations.The central bank has been buying dollars in the ready market with a simultaneous commitment to sell dollars back at future dates, they said.State Bank of Pakistan officials declined to comment."The rupee has been under pressure since yesterday due to some import payments," said a currency dealer."The outlook is still bleak due to the political developments this week and depleting reserves."Dealers said the market was nervous about the situation on the Pakistan-Afghanistan border and because of the global financial crisis after U.S. investment bank Lehman Brothers filed for bankruptcy protection this week.
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