The Pakistani rupee has fallen to a record low of 86.50 to the US dollar; as there is an increased demand for dollars for import payments. Also, flow of the much needed foreign aid to the country may be cut off due to increasing tensions with the West.
“The rupee traded at 86.50 and in the end closed at 85.85 but the sentiment is still weak because of the country’s bleak outlook,” said a bank dealer.
The major attack by militants on the Karachi naval aviation base, further weakened sentiment on the local currency which added to the country?s reputation for instability. Concerns over a reduction in foreign aid have flared up since the US special forces found and killed the much wanted Al Qaeda leader, Osama bin Laden, earlier this month in Pakistan.