THE rupee remained largely firm against the dollar in interbank dealings, but weakened against the reserve currency in the open market.

Record foreign exchange reserves, a rising domestic equity market and reports that the US Federal Reserve will keep interest rates low for an extended period were all said to have dampened the greenback’s value in the interbank market.

The rupee commenced last week in the interbank market by trading unchanged at the prior week’s closing level of Rs104.50 and Rs104.51. It then inched up by two paisas for buying and one-paisa for selling in the second trading session, as the dollar slipped to Rs104.48 and Rs104.50.

The rupee appreciated by eight paisas in interbank dealings but depreciated by 10 paisas in the open market last week

The rupee picked up one-paisa in the third trading session, as the dollar dipped to Rs104.47 and Rs104.49 for the day. The rupee rose by a further six paisas in the fourth trading session, sending the dollar down to Rs104.41 and Rs104.43.

But the dollar recouped one-paisa in the last trading session and closed the week at Rs104.42 and Rs104.44. As a result, the rupee appreciated by a net eight paisas in the interbank market last week.

In the open market, the rupee started the week by rising five paisas for buying and remaining unchanged for selling, as the dollar ended the first trading session at Rs104.25 and Rs104.50, against the prior week’s closing level of Rs104.30 and Rs104.50.

However, the greenback regained 10 paisas for buying and five paisas for selling in the second trading session and ended the day at Rs104.35 and Rs104.55. It rose by another five paisas in the third trading session and last changed hands at Rs104.40 and Rs104.60.

The rupee-dollar parity then remained unchanged at this level in the fourth and fifth trading sessions. As a result, the dollar appreciated by 10 paisas against the rupee in the open market last week.

The rupee performed equally poorly against the euro last week, amid some mild fluctuations. It commenced the week by shedding 25 paisas, as the single currency ended the first trading session at Rs116.50 and Rs117.50 against the prior week’s close of Rs116.25 and Rs117.25. The rupee-euro parity then remained unchanged at this level in the second trading session.

However, the rupee plunged by 75 paisas against the euro in the local currency market, hitting 117.25 and 118.25 in the third trading session.

However, the rupee managed to bounce back in the fourth trading session and posted an increase of 25 paisas against the single currency, which slipped to Rs117.00 and Rs118.00.

But the rupee shed 60 paisas in the last trading session, allowing the euro to close the week up at Rs117.60 and Rs118.60. As a result, the euro gained a net 135 paisas against the rupee last week.

Published in Dawn, Business & Finance weekly, October 12th, 2015

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