THE dollar remained largely steady at the 104.4-mark against the rupee last week owing to higher remittances and forex reserves and lower demand for the reserve currency.

Meanwhile, the dollar reportedly sank to seven-week lows against a basket of currencies last week as more signs of slowing growth in the United States and China raised doubts that the US Federal Reserve will raise interest rates later this year.

Commencing last week in the interbank market on a stable note, the rupee remain unchanged at the prior week’s closing level of Rs104.42 and Rs104.44 in the first trading session. The parity stayed unchanged in the second trading session as well.

The rupee appreciated by five paisas against the dollar in both the interbank and open markets last week.

The local currency inched up by one-paisa in the third trading session, as the dollar slipped to Rs104.41 and Rs104.43.

The rupee then picked up four paisas for buying and five paisas for selling in the fourth trading session, as the dollar ended the day at Rs104.37 and Rs104.38. The rupee-dollar parity then remained unchanged at this level in the last trading session.

As a result, the dollar depreciated by five paisas against the rupee in the interbank market last week. Meanwhile, the local currency is up a net 13 paisas against the dollar in the first three weeks of October, according to independent reports.

The rupee also stayed firm in the open market amid lacklustre trading. Relatively lesser-than-usual demand from the corporate sector and no sizeable payments from the national exchequer kept the dollar from surging in the open market.

The rupee commenced the week flat at the prior week’s closing level of Rs104.40 and Rs104.60. And the parity did not show any change in the following two sessions as well.

In the fourth trading session, the rupee managed to pick up five paisas, which sent the dollar down to Rs104.35 and Rs104.55 for the day. The rupee-dollar parity then remained unchanged at this level in the last trading session.

As a result, the dollar depreciated by five paisas in the open market last week.

However, the rupee continued its weakening trend against the euro amid some heightened volatility. It started the week by losing 20 paisas, allowing the euro to rise to Rs118.00 and Rs119.00 against the prior week’s closing level of Rs117.80 and Rs118.80.

It shed a further 40 paisas in the second trading session, pushing the single currency up at Rs118.40 and Rs119.40 for the day. The rupee-euro parity then remained unchanged at this level in the third trading session.

However, the euro surged by 30 paisas in the fourth trading session and ended the day at Rs118.70 and Rs119.70. But the rupee managed to recover a big 80 paisas in the last trading session, as the euro closed the week at Rs117.90 and Rs118.90.

As a result, the rupee depreciated by a net 10 paisas against the euro last week.

Published in Dawn, Business & Finance weekly, October 19th , 2015

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