Karachi  - The Pakistani rupee on Friday recovered slightly against the US dollar on central bank intervention but analysts said the overall picture remains sluggish on dwindling government reserves and costly imports.

The rupee recovered narrowly at 64.68 against the dollar in the inter-bank market as compared with 64.70/64.80 on Thursday. Analysts said the central State Bank of Pakistan intervened in the inter-bank market a day earlier which led to this slight recovery on Friday.

"The overall long-term outlook is still downward and the rupee will remain weak in coming weeks," said Rehanuddin, FX trader at Invest Cap Securities.

Meanwhile, the rupee in an unofficial open market also recovered on the central bank intervention, which amounted to anywhere between 10 and 15 million dollars, to
65.50/65.80 as compared with 67 against the dollar during late Thursday trading.

"The rupee was not available even at 67 yesterday (Thursday) and today (Friday) the situation has eased up though I think the rupee will again see declines, " said Nabeel Iqbal, head of trading and research at Khanani & Kalia, one of Pakistan's largest foreign exchange trading house.

Iqbal, however, said no trading took place on Thursday at 67 levels as most of the trading hovered at between 65.80/65.90 against the dollar. "Shortage of dollars led the rupee being quoted up to 67 on Thursday though no trading took place at this price," Iqbal said.

According to analysts, the rupee so far has lost 5.25 per cent against the US dollar in the inter-bank market during the last two months from 61.52 on February 20 this year to
64.68 at present.

"We see a 0.08 per cent decline almost every day," said Rehanuddin.

Latest figures say the central bank reserves fell by 392 million dollars to 12.652 billion in the weak closing on April 19 as compared with 13.044 billion a weak earlier.

The high import bill and sluggish exports have caused Pakistan's foreign exchange reserves to take a heavy beating, with reserves falling by a whopping 3.44 billion dollars during the last five months from the peak 16.486 billion dollars on October 31 last year.

Analysts say domestic food shortage of wheat and high international oil prices are proving a double whammy for the rupee.

Pakistan, which buys 85 per cent of its crude oil overseas, has seen its oil bill rising by galloping 40 per cent since fiscal July 1 to March-end as the nation's trade deficit ballooned to 14.5 billion dollars (July-March), up by 45 per cent since the same period last year, according to Federal Bureau of Statistics (FBS).

The total energy import bill alone stood at 7.416 billion dollars during July-March as against 5.277 billion dollars in the same period last year. (dpa)