The rupee came under pressure from the dollar last week amid rising demand for the reserve currency. This came about despite the increase in the country’s forex reserves to $17.5bn.

In the interbank market, the rupee started the week with a loss of seven paisas for buying and four paisas for selling, as the greenback ended the first trading session at Rs101.57 and Rs101.59 against the prior week’s close of Rs101.50 and Rs101.55.

However, the rupee staged a marginal recovery in the second trading session, picking up one-paisa to end the day at 101.56 and 101.58. It gained another one-paisa in the third trading session, as the dollar slipped to Rs101.55 and Rs101.57.

However, the local currency shed eight-paisa in the fourth trading session, allowing the dollar to rise to Rs101.63 and Rs101.65. The rupee-dollar parity then remained unchanged at this level in the last trading session.

As a result, the dollar appreciated by 13 paisas for buying and 10 paisas for selling in the interbank market last week.

In the open market, a slight increase in dollar demand was noticed last week, but the rupee resisted sharp declines owing to sufficient dollar supplies. The local currency started the week by shedding 10 paisas, as the greenback rose to Rs102.40 and Rs102.60 in the first trading session, against the prior week’s closing level of Rs102.30 and Rs102.50.

The dollar appreciated by around 13 paisas in interbank dealings and by 20 paisas in the open market last week

The rupee lost a further five paisas in the second trading session, sending the dollar up at Rs102.45 and Rs102.65. However, the local currency regained five paisas in the third trading session, amid independent reports of dollar selling by banks and exporters. The dollar ended the day at Rs102.40 and Rs102.60.

But the dollar bounced back in the fourth trading session, rising by 10 paisas to end the day at Rs102.50 and Rs102.70. The rupee-dollar parity then remained unchanged at this level in the last trading session of the week.

As a result, the dollar appreciated by 20 paisas against the rupee in the open market last week.

The rupee fared similarly against the euro last week. It had started the week by rising 65 paisas, sending the single currency down to Rs109.75 and Rs110.00 in the first trading session, against the prior week’s close of Rs110.40 and Rs110.65.

The euro further slipped to Rs109.50 and Rs109.75 in the second trading session after the rupee picked up 25 paisas on the day.

However, the single currency bounced back in the third trading session, gaining 25 paisas to end the day at Rs109.75 and Rs110.00. It posted another gain of 35 paisas in the fourth trading session, sending the rupee down to 110.10 and 110.35.

The rupee’s downturn continued into the last trading session, as it lost a further 50 paisas, allowing the euro to close the week at Rs110.60 and Rs110.85. During the week, the euro managed to appreciate by a net 20 paisas against the rupee.

Published in Dawn, Economic & Business, April 27th, 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play