Rupee plummets to record low against dollar

The rupee fell to a record low against the dollar that was sold at Rs 77.20 in early trade on Wednesday.

Traders put down this fall to increasing trade deficits, heavy oil payments and political uncertainty. The rupee's previous record low at 76.90/77.10 to a dollar was set on Aug 22. The rupee has lost more than 20 percent of its value against the dollar this year. "There are heavy oil payment bills and little sign of any good liquidity inflow at the moment," said a dealer in Karachi. Inflation is soaring, high oil prices have depleted reserves, and trade and fiscal deficits are widening."

Investors fear Pakistan cannot pay for its imports given that reserves have fallen to a level worth less than three months of imports. The rupee during inter-bank trading Wednesday was seen touching its history's lowest ebb at 77.40 to a dollar. The dollar in the open market was selling at Rs 77.20.