The rupee remained under pressure from both the dollar and the euro in the local currency market last week. Trading was reduced to four sessions, with Friday (May 1) being a public holiday.

On the interbank market, the rupee started the week by losing 20 paisas for buying and 21 paisas for selling, sending the greenback up at Rs101.83 and Rs101.86 in the first trading session against the prior week’s close of Rs101.63 and Rs101.65.

But the rupee managed to regain one-paisa for buying and two paisas for selling in the second trading session, as the dollar dipped marginally to Rs101.82 and Rs101.84.

The dollar appreciated by around 10 paisas in interbank dealings but stayed unchanged in the open market last week

The local currency followed that by rising a further seven paisas for buying and six paisas for selling in the third trading session, as the dollar dropped to Rs101.75 and Rs101.78 for the day. The rupee then gained another three paisas in the last trading session, as the dollar closed the week at Rs101.72 and Rs101.75.

However, the dollar appreciated by nine paisas for buying and 10 paisas for selling in the interbank market last week. Yet, the greenback dropped by a net 22 paisas in April, according to independent reports.

In the open market, the rupee started the week by dropping 15 paisas, sending the dollar up at Rs102.60 and Rs102.80 in the first trading session, from the prior week’s closing level of Rs102.45 and Rs102.65.

Chart by RA

However, the rupee rebounded in the second trading session, gaining 10 paisas to send the dollar down to Rs102.50 and Rs102.70. The rupee-dollar parity then remained unchanged at this level in the third trading session.

In the last trading session, the rupee picked up five paisas, as the dollar closed the week at Rs102.45 and Rs102.65.

As a result, the rupee remained unchanged against the greenback in the open market on a net basis last week. However, the local currency depreciated by 15 paisas against the dollar in April.

Meanwhile, the rupee displayed major weakness against the euro last week, at least partly due to the single currency’s recent rising trend against major global currencies.

The euro commenced the week by staying unchanged at the prior week’s closing level of Rs111.00 and Rs111.25.

However, the rupee slipped by 50 paisas in the second trading session, sending the euro up at Rs111.50 and Rs111.70 for the day. The local currency shed another 50 paisas in the third trading session, allowing the euro to rise to Rs112.00 and Rs112.25.

The rupee then dived by a big 220 paisas in the last trading session as the euro soared to Rs114.20 and Rs114.45 at the close of the week. The single currency had crossed $1.12 against the dollar in international markets amid hopes that the troubled eurozone member would reach a deal with its creditors before it runs out of money.

As a result, the rupee suffered a loss of 320 paisas against the euro last week.

Published in Dawn, Economic & Business, May 4th, 2015

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