IN the local currency market, the rupee/dollar parity remained stable in interbank dealings despite extensive pressure in the open market.
Amid fluctuations, since April, the rupee, being in a tight spot, continued to slide against the dollar in the open market since the start of 2016.
The rupee has fallen around 1.03pc so far this month and by nearly 2pc since July. The rupee is currently trading at Rs107 against the dollar in the open market, its lowest level since December 2015.
Globally, the dollar rolled higher to a nearly 14-year peak versus major rivals last week, driven by an expected high US inflation and interest rates, leading to a more than 6pc gain in the past two months, its strongest showing over a similar period since early 2015.
The pound traded near a multi-decade low after its strongest monthly performance in eight years, hitting a nine-week high against other currencies. Last week on the interbank market, the rupee parity remained unchanged continued to trade at Rs104.84 and Rs104.85 for the first three consecutive sessions.
After trading flatly at Rs104.84 and Rs104.85 for three sessions, the rupee inched up slightly against the dollar in the fourth session, gaining three paisas and two paisas on the buying and selling counters respectively.
At the close of the week, the rupee reverted to the prior week’s position at Rs104.84 and Rs104.85 after losing three paisas and two paisas on buying and selling counters respectively in the last session.
On WoW basis, the dollar on the interbank market remained unchanged against the rupee.
In the open market, the dollar breached the Rs107 barrier, due to a mounting dollar demand last week. The rupee, in a negative mode, posted a 20 paisas loss against the dollar in the first session, hitting a fresh peak at Rs106.70 and Rs106.90 against the last closing at Rs106.50 and Rs106.70.
However, it dropped in overseas trade after rising 10 straight days following Donald Trump’s election, who is expected to adopt fiscal policies that will likely increase interest rates.
The dollar traded flat at Rs106.70 and Rs106.90 in the second session, remaining unchanged for two days. In overseas trade, however, the dollar resumed its uptrend. Dollar’s previous session took a brief pause in the third session when the rupee recovered 10 paisas, decelerating the dollar to Rs106.60 and Rs106.80 after it surged to a more than 13-year peak in overseas trade.
In the fourth trading session, the dollar again rebounded against the rupee which posted a 20 paisas loss Rs106.80 and Rs107.00, due to the rise in dollar demand from investors and buyers. The rupee downslide continued in the last session. The rupee further lost 20 paisas to close the week at Rs107 and Rs107.20.
The greenback has been in an uptrend throughout 2016, but the gains have accelerated following recent US elections. On WoW basis, the dollar in the open market appreciated by 50 paisas against the rupee last week.
Against euro, the rupee ended its multi-week strong run last week.
Published in Dawn, Business & Finance weekly, November 28th, 2016