THE rupee stayed firm against the dollar in interbank dealings but dropped past the 103-mark in the open market last week. Meanwhile, the dollar appreciated by around 3.2pc against the rupee in FY15.

On the interbank market, the rupee commenced last week by losing two paisas for buying and four paisas for selling, sending the dollar up at Rs101.80 and Rs101.83 against the previous week’s close of Rs101.78 and Rs101.79.

Also read: Tax on cash withdrawals stokes dollar demand

But it inched up by one-paisa for buying and two paisas for selling in the second trading session, as the dollar dipped to Rs101.79 and Rs101.81. Trading remained suspended on July 1 owing to a bank holiday.

The rupee appreciated by around four paisas against the dollar in interbank dealings but depreciated by 30 paisas in the open market last week

On July 2, the rupee picked up four paisas, sending the greenback down at Rs101.75 and Rs101.77. It further inched up by one-paisa in the last trading session, as the dollar closed the week at Rs101.74 and Rs101.76.

During the week, the dollar lost four paisas for buying and three paisas for selling in the interbank market.

In the open market, the rise in foreign exchange reserves to record levels failed to satiate the demand for the dollar in the open market. The rupee started the week by shedding 10 paisas, as the dollar ended the day at Rs102.80 and Rs103.00, against the prior week’s close of Rs102.70 and Rs102.90.

Chart by RA

But the rupee managed to recover five paisas in the second trading session, as the dollar dipped to Rs102.75 and Rs102.95. However, the rupee lost five paisas in the third trading session, as the greenback reverted to Rs102.80 and Rs103.00.

The local currency then lost another 10 paisas in the fourth trading session, allowing the dollar to rise to Rs102.90 and Rs103.10. Sustained dollar demand led the rupee to drop by a further 10 paisas in the fifth trading session, as the greenback closed the week at Rs103.00 and Rs103.20. During the week, the dollar appreciated by 30 paisas in the open market.

Meanwhile, the euro managed to stay surprisingly resilient against the rupee last week, despite the single currency coming under intense pressure from international currency owing to the Greek financial crisis.

The rupee commenced the week by gaining 50 paisas, sending the euro down at Rs113.50 and Rs114.50 in the first trading session against the prior week’s close of Rs114.00 and Rs115.00. But it then lost 70 paisas in the second trading session, as the euro recovered to reach Rs114.20 and Rs115.20.

The rupee then managed to regain 45 paisas in the third trading session, as the euro dipped to Rs113.75 and Rs114.75. But the euro picked up 25 paisas in the fourth trading session, and then another further 50 paisas in the last trading session to close the week at Rs114.00 and Rs115.00.

As a result, the rupee-euro parity remained unchanged at Rs114.00 and Rs115.00 on a weekly basis.

Published in Dawn, Economic & Business, July 6th, 2015

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