Pakistani rupee down to more than 6-year low

KARACHI (Reuters) - The Pakistani rupee weakened to a more than six-year low against the dollar on Friday as importers bought the U.S. currency to clear payments, dealers said.

The rupee closed at 62.64/69, its lowest level since October 2001.

Dealers said rising import payments, especially for oil, and outflows from financial markets had boosted dollar demand.

"Demand for dollar is increasing due to oil and gas payments and also because of outflows from the stock market," said a dealer at a brokerage house.

Short-term money rates fell sharply on Friday amid increased cash inflows this week.

Overnight call rates ended at 0.75 percent, down from Thursday's close of 4 percent.

"Yesterday, there was an inflow of 67 billion rupees against an outflow of about 45 billion rupees, so there is still liquidity in the market," said a brokerage dealer.

Dealers said the central bank may conduct a repo on Saturday to mop up liquidity in line with the tightening of the monetary policy for the six months to June 30.

The central bank on Thursday announced an increase in its discount rate to 10.5 percent from 10.0 percent and the cash reserve requirement to 8.0 percent from 7.0 percent, to tackle inflation and widening external and fiscal deficits.