POLITICAL unrest owing to two separate anti-government marches towards the capital put the rupee under pressure against both the dollar and the euro last week. The dollar breached the Rs100-mark for the first time in nearly five months.

Demand for the greenback rose sharply in the interbank market. The rupee started the week with a loss of 49 paisas for buying and 52 paisas for selling, as the dollar ended the first trading session at Rs99.35 and Rs99.40, against the prior week’s close of Rs98.86 and Rs98.88.

In the second trading session, the rupee staged a modest rebound, gaining five paisas to push the dollar slightly lower at Rs99.30 and Rs99.35. However, it shed a big 65 paisas in the third trading session, sending the greenback up at Rs99.95 and Rs100.00, a level last seen on March 11.

Trading remained suspended on August 14 on account of the independence day holiday. When trading resumed on Friday, the rupee resisted further decline and traded flat for buying and recovered two paisas for selling. As a result, the dollar ended the week at Rs99.95 and Rs99.98, gaining 109 paisas for buying and 110 paisas for selling on a weekly basis.

The local currency depreciated by around 110 paisas against the dollar in interbank dealings, and by 120 paisas in the open market. It also shed 105 paisas against the euro

In the open market, the dollar breached the Rs100-barrier for the first time since April 24. The rupee started the week with a loss of 50 paisas in the first trading session, as the greenback climbed to Rs99.20 and Rs99.40, against the prior week’s close of Rs98.70 and Rs98.90.

The rupee shed 10 paisas in the second trading session, pushing the dollar further up to Rs99.30 and Rs99.50. The dollar continued its upward trend, gaining 40 paisas to close the third trading session at Rs99.70 and Rs99.90. No trading took place on August 14.

In the last trading session, the rupee shed another 40 paisas, as the dollar closed the week at Rs99.90 and Rs100.10, a level last seen since March 19. The dollar appreciated by 120 paisas against the rupee in the open market last week.

The rupee fared similarly against the euro. It started the week with a loss of 50 paisas, sending the euro up to Rs132.25 and Rs132.50, against the prior week’s closing level of Rs131.75 and Rs132.00.

However, the rupee managed to pick up 25 paisas in the second trading session, as the euro slipped to Rs132.00 and Rs132.25. The rupee-euro parity remained unchanged at this level on Wednesday, and trading remained suspended on Thursday.

In the last trading session, the euro gained a big 80 paisas to close the week at Rs132.80 and Rs133.05. During the week, the euro appreciated by 105 paisas against the rupee.

Published in Dawn, Economic & Business, August 18th, 2014