THE local currency continued to lose ground against the dollar last week as the political unrest in Islamabad reached its one-month mark and as heavy rainfall, followed by big floods, ravaged Punjab.

However, the spread between the buying and selling rates for the dollar narrowed from 20 paisas in the open market to five paisas in the interbank market.

On the interbank market, the rupee commenced the week trading unchanged at the prior week’s closing level of Rs102.15 and Rs102.18 in the first trading session. It then gained three paisas for buying and four paisas for selling in the second trading session, as the dollar slipped to Rs102.12 and Rs102.14.

The rupee rose by a further eight paisas in the fourth trading session, sending the greenback lower at Rs102.04 and Rs102.06.

The dollar appreciated by around 37 paisas in interbank dealings and by 40 paisas in the open market last week

However, the dollar bounced back in the fourth trading session, gaining 21 paisas for buying and 22 paisas for selling to end the day at Rs102.25 and Rs102.28, amid reports of a rise in demand for the reserve currency.

The rupee shed another 25 paisa for buying and 27 paisa for selling in the last trading session, as the dollar closed the week at Rs102.50 and Rs102.55. The dollar appreciated by around 37 paisas in the interbank market last week.

In the open market, the rupee started the week by gaining 10 paisas, as the dollar ended the first trading session at Rs101.80 and Rs102.00, against the prior week’s close of Rs101.90 and Rs102.10. The rupee rose by a further 20 paisas in the second trading session, sending the dollar lower to Rs101.60 and Rs101.80.

However, it slipped by 10 paisas in the third trading session under mounting dollar demand, sending the greenback up at Rs101.70 and Rs101.90. The rupee shed another 30 paisa in the fourth trading session, as the dollar ended the day at Rs102.00 and Rs102.20.

The local currency tumbled by a further 30 paisas in the fifth trading session, pushing the dollar up at Rs102.30 and Rs102.50. The greenback appreciated by 40 paisas in the open market last week.

The rupee fared similarly against the euro. It started the week unchanged at the prior week’s closing level of Rs132.00 and Rs132.25. However, the rupee picked up 75 paisas in the second trading session, sending the single currency lower at Rs131.25 and Rs131.50.

But the rupee slipped by 50 paisas in the third trading session, as the euro last changed hands at Rs131.75 and Rs132.00. The rupee-euro parity remained unchanged at this level in the fourth trading session. However, the local currency shed 75 paisas in the last trading session, as the euro closed the week at Rs132.50 and Rs132.75.

Published in Dawn, Economic & Business, Sep 15th, 2014