Mixed sentiments were witnessed last week in the local currency market.

During the week, the rupee/dollar parity showed normal movements within narrow band on the interbank market but some hectic trading was observed in the open market where the dollar crossed Rs108 barrier in the early trading sessions.

The rupee in the open market has been constantly losing value against dollar since past few weeks.

The rupee in the open market has been constantly losing value against the dollar since past few weeks

The gap between the interbank and open market dollar rates has widened sharply in recent month despite the SBP’s strict monitoring to check outflows and stabilise the domestic currency.

Foreign Exchange dealers see increasing gold smuggling and dollar outflows developing pressure on the local currency.

Last week on the interbank market, the rupee continued to trade in narrow band against the dollar for the fourth successive week, moving both ways between the high of Rs104.82/83 and the low of Rs104.85/86 amid mixed sentiments.

The week ended on a negative note as the rupee inched down marginally against the dollar in the last trading session, posting one-paisa loss at Rs104.83 and Rs104.84 after the dollar in overseas trade slipped against most major rivals, giving up ground ahead of the release of US monthly jobs report.

During the week in review, the dollar on the interbank market gained three-paisa against the rupee in two session and lost four-paisa in three sessions, restricting weekly fall against the rupee to just one-paisa on week on week basis.

In the open market, the dollar was seen hitting the Rs108 barrier against the rupee at one point as the rupee/dollar parity remained under pressure due to the abrupt increase in dollar demand.

Extending weekend losses, the rupee downtrend against the dollar persisted for the third consecutive week.

In the last trading session, the rupee managed to hold overnight firmness against the dollar. It picked up ten-paisa for the second straight day before closing the week at Rs107.40 and Rs107.70.

During the week, however, the dollar in the open market managed to appreciate against the rupee by 25paisa on the buying counter and 30paisa on the selling counter.

Against euro, the rupee moved both ways, trading in narrow ranges last week.

Commencing the week on a negative note, the rupee again rebounded sharply against the euro in the fourth trading session, picking up Rs1.05 on the buying counter and another 55paisa on the selling counter to trade at the week’s highest level at Rs113.75 and Rs115.25.

The rupee did not show any change against the euro in the last trading session and traded flat at Rs113.75 and Rs115.25 for the second straight day in the last trading session.

On week on week basis, the euro lost 50 paisa against the rupee last week.

Published in Dawn, Business & Finance weekly, December 5th, 2016