Pak Rupee strengthens after Musharraf’s departure

Shafqat Ali

ISLAMABAD: Following the resignation of President Pervez Musharraf, the rupee has started recovering against the US dollar.

In Tuesday’s trade, rupee ended at 73.20 against the dollar, a recovery of more than 2 percent. The dollar was also sold at Rs 73.30-40 in the market.

The rupee strengthened as much as two rupees against the dollar to 73.30/60, compared to its close on Monday of 75.30/45.

The country is struggling with widening trade and fiscal deficits, soaring inflation, and falling foreign exchange reserves depleted by high oil prices at a rate that has alarmed investors.

The ailing economy has dragged on the rupee, which has lost over a fifth of its value against the dollar this year.

The currency slid to record lows against the dollar for five consecutive sessions last week, forcing the State Bank to call on commercial banks on Friday to bring $200-220million worth of overdue export revenues back into Pakistan.

The strengthening rupee can, however, once again start falling if the coalition partners, Pakistan People’s Party (PPP) and Pakistan Muslim League (Nawaz) do not stick together. There are speculations that the two parties might fall apart and revive their rivalry like the past.

Source: The post, 20/8/2008

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