HECTIC dollar buying in both the interbank and open markets amid the prevailing political uncertainty, coupled with a decline in the country’s overall forex reserves, led to the rupee sliding last week.

In the interbank, the rupee started the week with a loss of eight paisas for buying and seven paisas for selling, sending the dollar up past the Rs100 level to Rs100.03 and Rs100.05, against the prior week’s close of Rs99.95 and Rs99.98.

In the second trading session, the rupee shed 42 paisas for buying counter and 45 paisas for selling, as the greenback ended the day at Rs100.45 and Rs100.50.

The rupee fell by 170 paisas against the dollar in interbank dealings and by 155 paisas in the open market last week

The reserve currency gained a further 40 paisas in the fourth trading session and ended the day at Rs100.85 and Rs100.90. In the fourth trading session, the dollar last traded at Rs101.10 and Rs101.15 after the rupee slipped by 25 paisas.

The rupee then fell by a big 55 paisas in the last trading session, with the dollar closing the week at Rs101.65 and Rs101.70. The local currency depreciated by 170 paisas against the greenback in the interbank market last week.

In the open market, the rupee commenced the week by losing 10 paisas for buying but stayed unchanged for selling, as the dollar ended the first trading session at Rs99.85 and Rs99.95, against the prior week’s close of Rs99.75 and Rs99.95.

Chart by RA

In the second trading session, the rupee shed 50 paisas for buying and 60 paisas for selling, sending the greenback up at Rs100.35 and Rs100.55. The local currency dropped by another 55 paisas, as the dollar the third trading session at Rs100.90 and Rs101.10.

However, the rupee managed to recover 20 paisas for buying and 15 paisas for selling in the fourth trading session, as the dollar dipped to Rs100.70 and Rs100.95. However, the rupee suffered a loss of 60 paisas for buying and 55 paisas for selling in the last trading session, as the greenback closed the week at Rs101.30 and Rs101.50. The local currency depreciated by 155 paisas in the open market last week.

The rupee fared similarly against the euro. It had started the week with a gain of 20 paisas, as the euro ended the first trading session at Rs133.00 and Rs133.25, against the prior week’s close of Rs133.20 and Rs133.45. But the rupee then shed 50 paisas in the second trading session, sending the euro up at Rs133.50 and Rs133.75.

The rupee-euro parity remained unchanged at this level in the third trading session. In the fourth trading session, the local currency gained 40 paisas, sending the euro lower at Rs133.10 and Rs133.35.

However, it lost a big 90 paisas in the final trading session, as the single currency closed the week at Rs134.00 and Rs134.25.

Published in Dawn, Economic & Business, August 25th, 2014