Rupee report: Rupee strengthens against dollarArchive
THE rupee has been showing a stable trend against the dollar over the past few months after some hefty rises and falls in early 2016.
The local currency market resumed trading operation last week after a prolonged weekend on account of Eid-ul-Fitr celebrations from July 5 to July 9. With foreign exchange reserves at record levels, there were sufficient dollar supplies available in the market as workers’ remittances sent by overseas Pakistanis ahead of Eid-ul-Fitr continued to surge and posted almost 5pc growth during the first half of 2016.
Besides, higher inflows under home remittances ahead of Eid-ul-Fitr, strict SBP monitoring to stabilise domestic currency also provided support to the rupee.
On the interbank market last week, there was a lack of interest in trading activities during the first session operation as market participants were still in a festive mood. The rupee/dollar parity showed a steadier trend amid dull trading in the week’s opening session.
The rupee ended the week on a firm note, trading range-bound at Rs104.84 and Rs104.85, after posting a one-paisa gain against the dollar in the fifth trading session. During the week in review, the dollar on the interbank market lost three-paisa on the buying counter and another four-paisa on the selling counter in three sessions and simultaneously gained one-paisa against the rupee in one session. On week on week basis, however, the rupee gained up to three-paisa against the dollar on the interbank market.
In the open market, the rupee traded range bound after commencing the week on a negative note on rise in dollar demand. It, however, ended the week on a positive note as the dollar lost five-paisas against the rupee in the fifth trading session and ended the week at Rs105.15 and Rs105.35. During the week in review, the dollar in the open market still managed to gain 15paisas against the rupee on week on week basis.
Against euro, the rupee turned minus last week and then mostly traded in the negative mode. It commenced the week with a 50paisas loss, changing hands against the euro in the first trading session at Rs115.00 and Rs116.00, down from the previous week close at Rs114.50 and Rs115.50. The euro in the second trading session further extended overnight gains, picking up another 50paisa that pushed the rupee further down at Rs115.50 and Rs116.50.
After losing 100paisas against the euro in the first two trading sessions, the rupee, however, managed to hold overnight levels unchanged, trading flat for the second day in a row in the third trading session. But then it further drifted lower in the fourth trading session as it posted 80paisas loss, its biggest one day fall in the week that pushed euro to the week’s highest levels at Rs116.30 and Rs117.30. The rupee ended the week on a positive note as it managed to recover against the euro in the last trading session, posting ten-paisa gain at Rs116.20 and Rs117.20. During the week, the rupee lost Rs1.80 in three sessions, while gaining ten-paisas in one session. On week on week basis, the euro gained Rs1.70 against the rupee.
Published in Dawn, Business & Finance weekly, July 18th, 2016