In the local currency market, the dollar was seen gaining momentum against the rupee last week.
Besides mounting dollar demand in the open market, strengthening dollar in the international trade also exerted downward pressure on the rupee.
The pressure on Pakistan’s external account is increasing steadily which is likely to weigh on forex reserves.
Currently the rupee is trading within a tight range of 105.40/44 in the interbank market
Currently the rupee is trading within a tight range of 105.40/44 in the interbank market but it has weakened sharply against the dollar in the open market over the past two weeks, signalling a need for devaluation.
Last week on the interbank market, the rupee/dollar parity continued to trade in narrow band amid slight variations.
On Monday the dollar was seen trading at Rs105.42 and Rs105.44 slightly up against the last closing at Rs105.41 and Rs105.43. The rupee traded almost flat against the dollar on Tuesday at Rs105.42 and Rs105.43.
On Wednesday the dollar drifted lower to trade Rs105.41 and Rs105.42.
Sluggish trading activities prevailed on Thursday. The parity stayed unchanged for the second straight day as the rupee retained its overnight rates, closing the session flat against the dollar at Rs105.41 and Rs105.42.
The dollar closed even in value versus the rupee with minor variation in interbank on Friday at Rs105.41 and Rs105.43.
In the open market, the rupee was seen depressed last week as the dollar continued its advances for the second week in a row.
Commencing the week in negative, on Monday the dollar was changing hands at Rs106.20 and Rs106.40 against the prior weekend’s level of Rs106.10 and Rs106.30.
The rupee weakening trend persisted on Tuesday pushing the dollar to fresh highs at Rs106.30 and Rs106.50.
The parity remained unchanged on Wednesday at Rs106.30 and Rs106.50.
On Thursday, the dollar struck almost a one and-a half-month high against the rupee at Rs106.40 and Rs106.60. and on Friday the dollar to rise to fresh highs at Rs106.50 and Rs106.70.
Against euro, the rupee continued to show mixed sentiments amid sharp variations, moving both ways in narrow ranges. The rupee commenced the week in plus on Monday with euro slipping to Rs124.50 and Rs125.75 from the prior weekend’s level of Rs125.10 and Rs126.60. On Tuesday the euro crawled to Rs124.75 and Rs126.00.
The rupee extended its overnight losses on Wednesday, changing hands against the euro at Rs124.80 and Rs126.00. The rupee traded firm against the euro on Thursday closing the session at Rs124.80 and Rs125.80.
On Friday it traded at Rs124.50 and Rs125.50.
Published in Dawn, The Business and Finance Weekly, October 9th, 2017