No major development was witnessed in the local currency market last week.

The rupee remained almost flat against the dollar amid dull trading. The dollar rate differential between the open market and the interbank dealing remained at Rs1.08 on the week average.

On the interbank market, the rupee continued to show a stable trend amid sufficient liquidity to cater to the market’s demand. However, minor changes were observed with the rupee/dollar parity moving both ways in tight band.

The rupee commenced the week on a negative note against the dollar.

In the last trading session, the rupee held its overnight firmness against the dollar. The parity did not depict any change and closed the week flat at Rs104.79 and Rs104.81 amid slowdown in dollar demand and lack of trading interest.

Against euro, the rupee traded under pressure last week

Against the rupee, the dollar on the interbank market gained three-paisa on the buying counter and two-paisa on the selling counter in one session and lost six-paisa on the buying counter and five-paisa on the selling counter in two sessions in the week. However, the rupee still managed to gain three-paisa against the dollar on the week and was up 0.06pc for the month.

In the open market, the rupee/dollar parity did not show any change over the last closing levels as both the demand and supply of dollar remained in balance throughout last week.

The rupee sustained its weekend levels against the dollar at Rs105.90 and Rs106.10 in the first trading session and traded flat at Rs105.90 and Rs106.10 for four straight sessions.

Relatively lower-than-usual demand from importers and the corporate sector and no sizeable payments kept the dollar away from surging during the week in review.

Against euro, the rupee traded under pressure last week.

Extending previous week’s prolonged weakness, the rupee commenced the week in minus as the euro surged to its strongest level against the dollar in over five-months in international trade.

It posted the biggest single day loss in almost six weeks after shedding Rs1.20 in the first trading session that enabled euro to climb to Rs114.20 and Rs115.70 from the prior week’s closing levels of Rs113.00 and Rs114.50.

However after suffering cumulative loss of Rs1.75 in the first three sessions, the rupee turned positive against the euro, picking up 25paisa at Rs114.50 and Rs116.00 in the fourth trading session as the euro in overseas trade turned decisively lower after the European Central Bank president reportedly stated that the eurozone’s economic outlook remains uncertain despite signs the economy is improving at the fastest pace in six years.

The rupee failed to hold its overnight firmness against the euro in the last trading session. It closed the week at Rs115.00 and Rs116.50 as the euro shed some of its monthly gains against the dollar.

Published in Dawn, The Business and Finance Weekly, May 1st, 2017