Firmness prevailed in the local currency market last week.

Commercial banks maintained a balance between demand and supply amid dull dollar demand from importers and companies due to lack of interest by market participants as the SBP tightened foreign exchange management to check outflows and stabilise the domestic currency.

According to most forex analysts, the rupee is likely to remain firm because of the forex influx amid moderate demand by the corporate sector for its import payments.

On the interbank market, the rupee-dollar parity remained range-bound last week.

It commenced the week in minus as the rupee lost two-paisa in the first trading session.

Commercial banks maintained a balance between demand and supply amid dull dollar demand from importers as the SBP tightened foreign exchange management

Finally, the rupee ended the week against the dollar on a firm note. It continued to trade flat for the fifth straight day at Rs104.85 and Rs104.86 as importers and corporations appeared reluctant to take fresh positions in the last trading session.

During the week in review, the dollar gained two-paisa against the rupee on the interbank market.

In the open market, the rupee closed firm last week as demand and supply of the dollar almost remained in balance. The parity did not show any change in the week’s opening session.

In the overseas trade the dollar index against a basket of currencies remained steady in the after having risen for 10 straight days before losing momentum despite a string of solid US data.

The rupee, finally, ended the week on a positive note as it managed to recover ten-paisa against the dollar in the last trading session, changing hands at Rs107.00 and Rs107.20.

In the open market, the rupee has so far posted 70paisa gain against the dollar in the four weeks of February while the dollar has suffered a loss of Rs1.20 against the rupee since the start of the year 2017.

Against euro, the rupee showed a firm trend last week, trading in narrow ranges between Rs112.50/113.25 on the buying counter and Rs114.00/114.75 on the selling counter.

During the week, the euro hit an eight-week low against the rupee.

The euro managed to bounce back against the rupee in the fourth trading session when it traded at Rs112.80 and Rs114.30 after the rupee suffered 30paisa loss against the euro.

The rupee downslide versus euro persisted for the second consecutive day as the domestic currency shed 20paisa in the last trading session and closed the week Rs113.00 and Rs114.50.

During the week, the euro managed to gain 75paisa against the rupee in three sessions and at the same time it lost by the same amount in two sessions. As a result, the parity sustained its previous weekend level unchanged on week on week basis.

Published in Dawn, Economic & Business, February 27th, 2017