In the post budget session, the rupee showed mixed sentiments versus the dollar and euro. There has been sufficient dollar supply due to increase in the remittances by the overseas Pakistanis, during the current fiscal year so far.
As a result, the rupee has managed to perform well during the current, amid rising demand by the importers to clear the payment before the end of the fiscal year. During the current fiscal year so far, the rupee has depreciated against the dollar by 0.7 per cent in the inter bank market and open market, while it had declined by 5.9pc against the euro.
This week, the local currency market observed some bullish moves by the rupee against the American and European currencies. On the opening day of the week, the rupee drifted lower versus the dollar in the interbank market, losing five paisa for buying and six paisa for selling. It traded at Rs60.65 and Rs60.67 on June 11, after closing at Rs60.60 and Rs60.61 last week. The post-budget session saw bearish sentiment in the currency market as the rupee could not retain its weekend firmness against the dollar due to importers' demand for dollars to clear the payments before the end of the outgoing fiscal year.
The rupee weakness versus the dollar persisted on the second trading day, as higher demand for dollars to make payments continued to exert downward pressure on the rupee, which shed three paisa more on June 12, to trade at Rs60.68 and Rs60.70 versus the dollar. On the third trading day of the week in review, the rupee in the inter bank market, however, managed to recover its past two days losses versus the dollar.
Continued rise in the remittance and reports that the UAE to double investment in the country, which is nearly $26 billion, improved dollars supply despite the fact that the importers were busy in clearing the bills. The rupee posted sharp gains against the US currency and picked up eight paisa in a single day trading, changing hands at Rs60.61 and Rs60.63 on June 13.
The rupee maintained its surge against dollar for the second consecutive day on June 14, when it recovered two paisa and traded at Rs60.59 and Rs60.61 on easy supply of dollar. On June 15, the inter bank market did not observed any major change in the rupee/dollar parity, which traded at Rs60.60 and Rs60.61. During the week in review, the rupee, however, managed to gain five paisa for buying and six paisa for selling.
In the open market, the rupee fell sharply against the dollar, shedding eight paisa on the opening day of the week in review, when it was seen changing hands at Rs60.90 and Rs60.98. last week it had closed at Rs60.82 and Rs60.90. On the second day of the week in review, the rupee maintained its overnight levels on the buying counter but lost two paisa over the selling counter to trade at Rs60.90 and Rs61.0 against dollar.
On the third trading day, however, the rupee in the open market in line with inter bank market trend managed to recover five paisa on the buying counter and another eight paisa on the selling counter, changing hands versus the dollar at Rs60.85 and Rs60.92 on June 13. The rupee again failed to hold its overnight firmness versus the dollar on June 14 and lost five paisa on the buying counter and three paisa on the selling counter to trade versus the dollar at Rs.60.90 and Rs.60.95 on the fourth trading day.
Finally on the fifth trading day, demand for American currency mounted as importers were seen active in buying dollars to meet year end payment requirements. This exerted downward pressure on the rupee, which shed 10 paisa against dollar to trade at Rs61.00 and Rs61.05 on June 15. This week, the rupee in the open market lost 18 paisa on the buying counter and 15 paisa on the selling counter against the dollar.
Versus the European single common currency, the rupee gained three paisa over its previous weekend's levels of Rs81.18 and Rs81.28 and traded at Rs81.15 and Rs81.25 on June 11. On June 12, the rupee failed to hold its previous day's firmness versus the euro and lost seven paisa to trade at Rs81.22 and Rs81.32.On the following day, the rupee staged a sharp recovery against the euro, as it managed to recover past sessions' losses by gaining 42 paisa and changing hands at Rs80.80 and Rs80.90 on June 13.
Unable to maintain its overnight strength over the euro, the rupee again slid on June 14, shedding 13 paisa to trade at Rs80.93 and Rs81.03 against the European common currency. The rupee continued its decline versus the euro on June 15. It shed six paisa during the last session to change hands at Rs80.98 and Rs81.08. On cumulative basis, the rupee, however, managed to recover 24 paisa versus the euro, amid sharp fluctuations this week.
In the world financial markets, the US dollar briefly peaked just above 1.2400 Swiss francs, before settling at 1.2380 francs, up 0.3 per cent from late last week. It climbed for the fourth consecutive session against the euro, with the euro down 0.1 per cent at $1.3354, but was little changed against the yen at 121.74 yen. Sterling eased against the dollar, extending losses seen last week after a surge in US government bond yields boosted the greenback broadly. The pound was down 0.1 per cent on the day against the dollar at $1.9669.