IN the local currency market, the rupee/dollar parity showed mixed sentiments last week. The improved foreign inflows and interventions by the State Bank of Pakistan helped the local currency to remain in the comfort zone against the dollar.
Smooth dollar supplies resisted sharp decline in the rupee value. The reports that the IMF would release funds to Pakistan also provided some relief.
On the interbank market, the rupee traded in plus against the dollar in the week’s opening session, picking up 45 paisas on the buying and 44 paisas on the selling counters at Rs104.10 and Rs104.13, respectively.
The local currency remained in the comfort zone against the dollar
In the second trading session, the rupee slipped to Rs104.73 and Rs104.76 amid strong demand for the US currency from importers and banks. It suffered the biggest single-day loss of 63 paisas against the greenback since August 25, 2015.
The SBP intervention helped the rupee settled higher by seven paisas against the dollar at Rs104.66 and Rs104.69. The dollar traded further down at Rs104.65 and Rs104.68 in the fourth day of the week.
The rupee continued to display strength against the dollar in the absence demand from importers during the last trading session of the week. It closed the week higher at Rs104.53 and Rs104.56. As a result, the dollar on the interbank market lost two paisas against the rupee on a week-on-week basis.
In the open market, the rupee remained under demand pressure moving both ways against the dollar during the week. However, in the first trading session, it surged 40 paisas against the dollar atRs105.50 and Rs105.70, its highest level in 2016, from the previous weekend’s Rs105.90 and Rs106.10.
The dollar rebounded in the second trading session as the rupee failed to hold overnight firmness due to pick up in demand. It shed 30 paisas that pushed the dollar slightly higher at Rs105.80 and Rs106.00.
The local currency extended its overnight losses in the third session by shedding 20 paisas against the dollar at Rs106.00 and Rs106.20. It remained flat during the fourth day of the week.
Chart by RA
In the last trading session, the rupee managed to recover 10 paisas and closed the week versus the greenback at Rs105.90 and Rs106.10, showing no change over the previous week.
Against euro, the rupee last week came under tremendous pressure, suffering major losses in the last three trading sessions. The week commenced on a positive note as the rupee posted 70 paisas gain that pushed euro down to Rs116.00 and Rs117.00 from the previous weekend’s Rs116.70 and Rs117.70.
On a week- on-week basis, the euro managed to post gain of Rs1.90 against the rupee, bringing cumulative gains in the first two weeks of February to Rs2.80.