Rupee at record low against dollar

KARACHI-The rupee weakened to a record low of Rs78.50 against the dollar on Saturday despite the fresh inflow of US$500 million by the Asian Development Bank, as investors are still worried about the future of country's economy amid stable diminishing forex reserves and deteriorating law and order situation of the country, which had hardly hit the investor confidence. Traders said the rupee in the advent of trading the dollar was recorded at Rs78.25. By the end of trade, it wrapped up at Rs 78.50 on Saturday, showing decline of another 33 paisa.   Analysts held a view that deteriorating law and order situation in the tribal belt and shaky economy will further hit the rupee in coming weeks, and the government and State Bank of Pakistan mush take steps like getting foreign financial aid, chopping down imports to arrest the currency's dive. Asian Development Bank (ADB) during last week had approved $500 million loan to assist the Pakistan in order to deal with the repercussions of high oil and food prices. Dealers said that inflow of mere US$500mn is not enough to execute the current demand, adding such amount was not even sufficient to fulfil the demand of importers. Dealers were of the view that the rupee may remain under pressure due to import payments and continuous capital flight. But US 8.2 billion dollar aid package for Pakistan and other countries would probably pave the way for restoring the strength of rupee. "There has been panic in the market over the last couple of months due to the constant tumble in the stock market, depleting forex reserves melted down  to $8.13bn, shedding another $690m and  verdicts of downgrades by foreign research houses have shattered the confidence of investors,"  a dealer said. He added that we did not see any good news such as inflow of foreign funds except tall claims. Moody's Investor Services last month downgraded the outlook for Pakistani debt to negative, and highlighted the foreign exchange market's doubts over when funds would arrive to bolster dangerously low currency reserves.

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