The local currency market observed mixed sentiments versus the dollar and euro this week.High demand for dollar persisted throughout the week, but the rupee managed to restrict its sharp decline versus the dollar, amid fluctuations, on easy inflows.
The healthier inflows of remittances, increase in Foreign Direct Investment (FDI) and successful launching of Pakistan Eurobonds in the international financial markets pushed the foreign exchange reserves position higher-than-expected, hitting the new high.
On the week’s opening day, dollar demand by the importers kept the rupee under pressure. As a result, the rupee failed to maintain its firmness over its previous week’s levels in the inter-bank market falling three paisa against dollar from Rs60.59 and Rs60.61 to change hands at Rs60.62 and Rs60.64 on June 18.
On June 19, however, the rupee managed to recover its overnight losses on improved dollar supply. It picked up two paisa and traded at Rs60.60 and Rs60.62 against the dollar. The rupee firmly held its overnight firmness on the third day of the week under review. It inched up slightly, picking up one paisa on buying counter and two paisa on selling counter, changing hands at Rs60.59 and Rs60.60 on June 20.
The rupee failed to retain its overnight level against the dollar in the inter-bank market due to importers’ hectic dollar buying on June 21, when it shed three paisa for buying and four paisa for selling and traded at Rs60.62 and Rs60.64 against the US dollar.
On June 22, the rupee failed to retain its overnight gains as a result of higher demand for dollar to meet the import bills and shed five paisa to trade at Rs60.67 and Rs60.69. During the week, the rupee lost eight paisa against the US currency.
In the open market, the rupee began the week on a positive note and showed no change in the weekend’s levels of Rs61 and Rs61.10 despite persistent demand for the US currency on June 18. Increased dollar demand, however, pushed the rupee down in the open market on June 19, which shed eight paisa and traded at Rs61.08 and Rs60.18. Strong demand for dollars by the importers to meet their client’s requirements exerted downward pressure on the rupee.
The rupee extended its weakness versus the dollar on June 20, as higher demand for dollar forced the rupee to shed 10 paisa on buying and seven paisa on selling to trade at Rs61.18 and Rs61.25. On June 21, the rupee recovered its losses versus the dollar gained eight paisa on the buying counter and another five paisa on selling counter to change hands at Rs61.10 and Rs60.20.
On June 22, the rupee extended further gains against the dollar, picking up five paisa for buying and eight paisa for selling to trade at Rs61.05 and Rs61.12. As a result, the rupee, during the week in review, managed to restrict its decline in the open market to five paisa on buying counter and two paisa on selling counter in relation to dollar.
Against the European single common currency, the rupee opened the week on a negative note, shedding nine paisa from its previous weekend’s Rs81.45 and Rs81.55, and traded at Rs81.54 and Rs81.64 on June 18. The rupee continued its downtrend against the euro on June 19. It fell by 21 paisa, changing hands at Rs81.75 and Rs81.85. The single European currency made handsome gains in the international market.
On June 20, the rupee decline against the euro persisted, when it lost 10 paisa at Rs81.85 and Rs81.95. It, however, managed to recover on June 21, gaining 19 paisa to trade at Rs81.66 and Rs81.76. On June 22, the rupee extended further gains against euro at Rs81.60 and Rs81.70 on June 22.