Chart by Rehan Ahmed
Chart by Rehan Ahmed

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.

Chart by RA
Chart by RA

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

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Judiciary’s SOS
Updated 28 Mar, 2024

Judiciary’s SOS

The ball is now in CJP Isa’s court, and he will feel pressure to take action.
Data protection
28 Mar, 2024

Data protection

WHAT do we want? Data protection laws. When do we want them? Immediately. Without delay, if we are to prevent ...
Selling humans
28 Mar, 2024

Selling humans

HUMAN traders feed off economic distress; they peddle promises of a better life to the impoverished who, mired in...
New terror wave
Updated 27 Mar, 2024

New terror wave

The time has come for decisive government action against militancy.
Development costs
27 Mar, 2024

Development costs

A HEFTY escalation of 30pc in the cost of ongoing federal development schemes is one of the many decisions where the...
Aitchison controversy
Updated 27 Mar, 2024

Aitchison controversy

It is hoped that higher authorities realise that politics and nepotism have no place in schools.