THE local currency market operation was reduced to four sessions last week as markets remained closed on Friday owing to public holiday declared by the government on account of Eid Miladun Nabi.

During the week, the rupee traded firm against the dollar but fluctuated against the euro. Trading activity mostly remained sluggish throughout November with the rupee-dollar parity moving both ways in narrow ranges in the interbank market.

In the open market, however, the rupee remained under slight pressure against the dollar due to prevailing political uncertainty in the country. Currently, the dollar is trading at Rs105.50-52 in the interbank market and Rs107.40-60 in the open market.

The local currency posted 100-paisa gain against the euro

On Monday, the rupee traded flat on the buying counter, but inched down by one paisa on the selling counter, changing hands at Rs105.50 and Rs105.51.

The forex market sentiments on Tuesday remained relaxed and positive ahead of the launching of dollar-denominated sukuk and Eurobond sale.

On expectations that about $3 billion would be generated through the sale in the international capital market which will help increase foreign exchange reserves, the session ended with the rupee trading marginally higher at Rs105.49 and Rs105.50 after inching down by one paisa against the dollar.

On Wednesday, the rupee further posted two-paisa gain that pushed the dollar further down to Rs105.47 and Rs105.48 at the close of the session.

On Thursday, the rupee lost three paisa on the back of increased foreign currency demand from importers to cover payments.

The dollar buying by importers went up ahead of Eid Miladun Nabi holiday. Consequently, the dollar retracted to the week’s highest levels at Rs105.50 and Rs105.51. On a week-on-week basis, the dollar in the interbank dealings traded unchanged over the previous week close.

In the open market, the rupee to dollar exchange rate maintained a stable trend as trading activity remained sluggish last week.

Against the euro, the rupee traded firm amid minor changes. Extending weekend losses, the rupee shed 20 paisa in the first trading session, enabling the euro to climb to Rs127.70 and Rs128.95.

In the second trading session, however, the rupee turned positive against the euro after it managed to recover 40 paisa with the single common currency drifted lower at Rs127.30 and Rs128.55.

The rupee further extended its firmness for the second straight day, gaining another 80 paisa in the third trading session that pushed the euro further down to Rs126.50 and Rs127.75.

In the last trading session, the parity sustained its overnight level and traded unchanged for the second consecutive day, closing the week flat at Rs126.50 and Rs127.75.

Published in Dawn, The Business and Finance Weekly, December 4th, 2017