In the local currency market last week, experts said the rupee may come under pressure due to a widening trade deficit.
The rupee ended firm versus the dollar in the interbank on the back of sufficient liquidity with banks amid low demand from importers and the corporate sector.
The strict monitoring by the State Bank of Pakistan to control dollar outflow also kept the rupee from any big fall. Sufficient liquidity was available to meet import payment demand during the week.
Weak dollar in the international market supported the rupee but experts have said that the greenback’s demand for different payments would likely increase in coming weeks.
The dollar demand in the open market remained almost insignificant during the week.
On the interbank market last week, the rupee commenced the week on a stable note.
Range-bound trading was witnessed in the money market towards the close of the week. The rupee ended the week slightly depressed after a modest pickup in dollar demand from private sector buyers in the last trading session.
Turning minus in the last session, it inched down by one-paisa versus the dollar, closing the week at Rs104.86 and Rs104.87.
The rupee ended firm versus the dollar in the interbank on the back of sufficient liquidity with banks amid low demand
During the week in review, the dollar on the interbank market posted gains against the rupee in two sessions and suffered loss in one session while it traded flat in two sessions.
In the open market, the rupee remained firm against the dollar after a dull closure in the interbank.
The rupee ended unchanged, maintaining its last session’s levels against the dollar for the second consecutive day. It did not move any side in the last trading session and closed the week flat at Rs106.00 and Rs106.20 due to static dollar demand and supply.
The ease in external inflows also discouraged gain in the local currency value. During the week, the rupee in the open market appreciated by 15paisa against the dollar.
Against euro, the rupee continued to strengthen, amid fluctuations in a narrow band.
Expanding weekend firmness it commenced the week in plus, hitting a 20-month high at Rs111.50 and Rs112.50 the first trading session In the last trading session, the rupee turned positive against the euro and posted 25paisa gain before closing the week at Rs112.00 and Rs113.50.
In the five trading sessions, the rupee gained 95paisa on the buying counter and Rs1.45 on the selling counter in three sessions.
At the same time, it lost 95paisa on the buying counter and Rs1.45 on the selling counter in other two sessions. Thus the week ended flat against the euro, depicting no change over the previous week close.
Published in Dawn, Economic & Business, April 17th, 2017