THE rupee showed a weakening trend in the local currency market last week, but traded in a narrow range.

As a result, the dollar closed firm in both interbank and open currency markets while the leading currency dealers remained on the sidelines ahead of Supreme Court’s judgment in the Panama Papers case.

However, the State Bank of Pakistan continued to provide dollars to cater to import payments, restricting the rupee from falling sharply against the dollar.

The SBP continued dollar supply to cater to import payments, restricting the local currency from falling sharply once again

Currency dealers and experts believe that the rupee is likely to remain under some pressure in the coming weeks because of slow remittances from overseas Pakistani workers and moderate demand by the corporate sector for import payments.

On the interbank market, the rupee-to-dollar exchange remained escalated in a narrow range last week. The market experienced soft demand for dollar but the rupee was seen slightly depressed due to political uncertainty.

The rupee started the week in minus. As a result, the rupee drifted slightly lower to trade against the dollar at Rs105.39 and Rs105.40 amid sluggish activity on Monday. The session ended almost flat due to dull demand from importers.

On Tuesday, the rupee traded almost stable against the dollar as it remained unchanged on the buying counter but lost one paisa on the selling counter, changing hands at Rs105.39 and Rs105.41.

The rupee gained some strength against the dollar on Wednesday due to sufficient dollar supplies in the market. The dollar closed the session slightly lower at Rs105.22 and Rs105.26.

A fresh demand from importers compelled the rupee to give up its overnight firmness against the dollar in on Thursday. The rupee closed at Rs105.33 and Rs105.35.

On Friday, the parity did not show any change in its overnight rates and closed the week flat at Rs105.33 and Rs105.35.

In the open market, the rupee’s weakness versus the dollar persisted for the third consecutive week amid slight variations. It closed at Rs106.90 and Rs107.10 on Monday.

The downtrend continued on Tuesday amid political uncertainty.

The rupee further shed 10 paisa, changing hands against the dollar at Rs107.00 and Rs107.20.

On Wednesday, the rupee moved both ways against the dollar, but closed almost unchanged at Rs107.00 and Rs107.25.

As demand for the dollar remained firm, the rupee’s downslide versus the dollar continued on Thursday. It ended the session at Rs107.10 and Rs107.30.

In the absence of fresh demand for dollars, the rupee continued to trade flat at Rs107.10 and Rs107.30 on Friday.

Published in Dawn, The Business and Finance Weekly, July 24th, 2017