High demand for dollars forced the rupee to touch the new low and give up its stability versus the US currency at 85 on the interbank market on Saturday, marketmen said. The rupee lost 25 paisa against dollar for buying and selling at 85.05 and 85.10, they said.
The rupee was under pressure against dollar as on December 5, 2009, the State Bank of Pakistan (SBP) announced that banks will clear all oil payments, which basically caused higher demand for dollars and weakness of the rupee, currency viewers said. Importers were also busy in forward buying of dollars in anticipation of increase in oil prices on the globe, they added.
The SBP said late Tuesday that exchange rate volatility during the first half of the 2009/10 fiscal year was 2.7 percent, compared with 10.5 percent in the same period last year, which showed exchange rate stability with improving macroeconomic fundamentals. Some dealers said that dollar inflows in shape of remittances from overseas workers had also helped the rupee retain, to some extent, its value in recent days.
In the meantime it is most likely that as a result of fall in the rupee, the exports may get lift from the bottom side, experts said. In the month of January 2010, the rupee hit the record levels twice in a month at 85 and 86 due to panic buying of dollars, they added. 'So, we can expect further decline in the value of the rupee versus dollar in the coming days', they said.
At the weekend the dollar rose against major currencies after stronger-than-expected economic data reinforced the view the United States was recovering from recession faster than other developed countries. The euro fell below $1.39 to a 6-1/2-month low as investors remained concerned about the fiscal health of some of the smaller Euro zone countries including Greece and Portugal.
Data showed the US economy grew at a 5.7 percent annual rate in the fourth quarter, its quickest pace in more than six years. Separate reports showed business activity in the US Midwest expanded more than expected, while consumer sentiment hit a two-year high.

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Buying                Rs 85.05
Selling               Rs 85.10
==============================

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Open Buying           Rs 86.20
Open Selling          Rs 86.30
==============================
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Repo Rates (Yield p a)
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Tenor      Low Bid   High Bid   Low Offer   High Offer    Average
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Overnight    11.90      12.40      12.00       12.40        12.18
1-Week       11.65      12.05      11.95       12.10        11.94
2-Week       11.70      11.95      11.95       12.00        11.90
1-Month      11.75      11.95      11.90       12.00        11.90
2-Months     11.75      11.95      11.90       12.00        11.90
3-Months     11.75      11.95      11.95       12.00        11.91
4-Months     11.80      12.00      12.00       12.10        11.98
5-Months     11.80      12.00      12.00       12.10        11.98
6-Months     11.80      12.00      12.00       12.10        11.98
9-Months     11.85      12.00      11.95       12.15        11.99
1-Year       11.90      12.00      12.00       12.10        12.00
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Call Rates (Yield p a)
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Tenor      Low Bid   High Bid   Low Offer   High Offer    Average
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Overnight    12.00      12.40      12.20       12.45        12.26
1-Week       12.00      12.15      12.10       12.20        12.11
2-Week       11.85      12.10      11.90       12.15        12.00
1-Month      11.85      12.10      12.00       12.20        12.04
2-Months     11.90      12.15      12.10       12.25        12.10
3-Months     12.00      12.25      12.15       12.30        12.18
4-Months     12.15      12.25      12.20       12.30        12.23
5-Months     12.15      12.30      12.20       12.35        12.25
6-Months     12.15      12.30      12.25       12.35        12.26
9-Months     12.15      12.40      12.35       12.45        12.34
1-Year       12.25      12.45      12.40       12.50        12.40
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