The local currency market is currently experiencing an artificial hike in dollar value against the rupee.
The current rupee/dollar parity trend suggests that the dollar could soon hit the Rs108 barrier against the rupee.
Last week, a sharp rise was witnesses particularly in the open market where the dollar surpassed the Rs107 barrier.
The rising disparity between the interbank and open market dollar rates has prompted increased dollar buying.
The rupee on the interbank market continued to escalate against the dollar both ways in narrow ranges.
The week commenced in minus with the rupee inching down against the dollar at Rs105.42 and Rs105.43 on Monday from the last closing at Rs105.41 and Rs105.42.
On Tuesday, the rupee further posted a loss on the buying and selling counter which enabled the dollar to climb to Rs105.43 and Rs105.45.
The current rupee/dollar parity trend suggests that the dollar could soon hit the Rs108 barrier against the rupee
The rupee managed to rebound against the dollar on Wednesday with the dollar changing hands at Rs105.41 and Rs105.43. The rupee continued to recover early losses amid sluggish trading activity on Thursday, rising to its highest level in seven weeks at Rs105.37 and Rs105.40.
On Friday the rupee recorded the all-round gains, pushing the dollar to seven-week lows at Rs105.34 and Rs105.36
In the open market, the rupee devaluation pressure was seen building up last week as the rupee continued to weaken against the dollar for the third consecutive week.
On Monday the dollar climbed to Rs106.60 and Rs106.80 from the prior week’s closing level of Rs106.50 and Rs106.70 on mounting dollar demand.
On Tuesday the rupee continued its downslide descending to Rs106.80 and Rs107.00.
On Wednesday the dollar continued to strengthen against the rupee trading at Rs107.10 and at Rs107.30.
On Thursday the rupee traded without any variation with the dollar trading flat at Rs107.10 and Rs107.30 for the second day in a row.
The rupee managed to stage a rebound against the dollar, recovering partial losses and closed the week against the dollar at Rs107.00 and Rs107.20
The euro rebounded sharply against the rupee as the rupee assumed downtrend.
On Monday the euro changed hands at Rs124.80 and Rs126.05 against the previous weekend’s levels of Rs124.50 and Rs125.75.
On Tuesday the rupee further drifted lower against the euro and traded at Rs125.40 and Rs126.40.
Continuing its downslide against the euro on Wednesday, the rupee further lost enabling the euro to rise to Rs126.00 and Rs127.25.
The rupee downtrend persisted against the euro on Thursday enabling the euro to hit two-and-a half- month highs at Rs126.50 and Rs127.70.
On Friday the rupee turned positive against the euro closing the week at Rs126.00 and Rs127.20.
Published in Dawn, The Business and Finance Weekly, October 16th, 2017