The local currency market witnessed dull trading activity last week while the rupee/dollar parity showed a steady trend.

Trading was seen normalising.

On the interbank market, the rupee traded firm against the dollar. The parity was steady after commencing the week flat at Rs115.61 and Rs115.62. Retaining overnight rate in all the four trading sessions, the rupee closed the week unchanged at Rs115.61 and Rs115.62 against the dollar amid normal dollar demand from importers.

There was no pressure on the rupee as dollar supplies were sufficient to meet dollar demand from importers.

In the month of April, the dollar in the interbank market had appreciated by 0.1pc against the rupee amid fluctuations between the low of Rs115.49/51 and high of Rs115.62/63.

In the open market the rupee/dollar parity continued to show a stable trend for the second consecutive week.

The rupee commenced week unchanged at Rs118.20 and Rs118.70 and traded flat throughout the week, closing the last trading session at the same level against the dollar.

On interbank marketthe rupee closed the week at Rs115.61 and Rs115.62 against the dollar

Traders expect the remittance in coming weeks ahead of Ramazan and Eid-ul-Fitr will further improve dollar liquidity in the open market.

The week ended on a positive note as the rupee managed to recover against the dollar, changing hands at Rs117.80 and Rs118.30 after trading flat at Rs118.20 and Rs118.70 for almost a week.

Against euro, the rupee traded firm last week after snapping previous weekend losses.

Regaining strength in the week’s opening session, it commenced the week on a positive note, with euro changing hands at Rs143.00 and Rs144.50 on Monday against the prior weekend’s levels of Rs143.25 and Rs144.75.

Trading operation remained suspended on May 1, due to the closure of all banks, financial and commercial centres being Labour Day holiday. When trading resumed on May 2, the rupee extended overnight firmness against the euro that pushed euro down at Rs142.30 and Rs143.80 on Wednesday.

The euro downtrend against the rupee persisted on Thursday as the rupee managed to pick up 130paisa in the biggest single day gain in four months. Consequently, the euro tumbled to a five-week low at Rs141.60 and Rs143.10 on May 3

The euro remained depressed against the rupee on Friday, closing the week at Rs140.80 and Rs142.50, its highest level in six weeks.

During the week, the euro lost Rs2.70 on the buying counter and Rs2.25 on the selling counter after appreciating by 1.4pc against the rupee amid variations in the month of April.

Published in Dawn, The Business and Finance Weekly, May 7th, 2018