Pakistan’s rupee weakened beyond 100 per dollar to a record low in the so-called kerb market amid concern loan repayments to the International Monetary Fund will further erode the nation’s foreign-exchange reserves.
The State Bank of Pakistan tapped the nation’s currency stockpile to pay $145.8 million to the Washington-based lender this week, Syed Wasimuddin, the central bank’s Karachi-based spokesman, said in an e-mail today. The payments are putting pressure on the country’s reserves, which declined to $8.7 billion last month from $12.5 billion a year earlier, Moody’s Investors Service said in a statement on Feb. 7.
“People are converting their goods into dollars because they feel the country will not have enough money to pay the IMF,” said Bilal Razzak, a trader in Karachi at Glaxy Exchange Pvt., a foreign-exchange firm. “They are converting their savings and stay safe, in case there is a shortage of cash.”
The rupee fell to 100.10 per dollar today from 100.00 yesterday in the kerb market, according to Glaxy Exchange and Mega Currency Exchange Co., another Karachi-based currency firm.
In the interbank market, the rupee slid 0.1 percent to 98.075 per dollar as of 2:48 p.m. in Karachi, according to data compiled by Bloomberg. It lost 0.9 percent so far this year.
Rates at Pakistan’s kerb market, which isn’t regulated by the central bank, account for 20 percent of total transactions, and caters to the majority of the public. The market allows individual buyers and sellers to exchange currencies outside central bank rules that regulate interbank trading, Sayem Ali, an economist in Karachi at Standard Chartered Plc, said by phone.
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