The completion of third quarter payments of the current fiscal helped the rupee recover its value versus the dollar in the currency market last week.
In the interbank market, the rupee posted a fresh gain of 14 paisa in relation to the dollar for buying and selling at Rs 57.39 and Rs 57.41 respectively, while in the open market, it gained three paisa against the dollar for buying and selling at Rs 57.77 and Rs 57.82.
In terms of the euro, the rupee gained 15 paisa for buying and selling at Rs 69.89 and Rs 70.19.
It came under observation that the rupee started showing its recovery on the back of easy supply of dollars after the huge bank payments, the market analysts said, adding the rupee would continue its firmness in the near future versus the greenback.
It, however, came under pressure versus the euro as the single European currency is depicting its strength versus the world currencies.
Commenting on the rupee's trend versus the euro, experts said despite a slight gain in its value, it is still under pressure versus the euro.
Under the general scheme of preferences (GSP), they were anticipating that the exports might show further improvement and the Pak exporters are likely to say their European partners to open letters of credit (L/C) in the euros.
Last week, the SBP in its second quarterly report said the rupee lost modestly versus the euro, but on the other hand, it continuously gaining its value versus the greenback. In the report, the bank signalled that it might slow down dollars buying from the interbank market.
According to the report, the rupee appreciated by 2.9 percent versus the dollar in the first quarter of the last fiscal year. It, however, fell against the euro by 3.5 percent during July-December 2002 period, and became more pronounced in the same period of 2003, when it showed a depreciation of 4.5 percent.
It came under observation that European exporters were quoting their products selling prices in euro. On the other hand, they were purchasing the products in dollars from Pakistan.
After maintaining a firm trend for several months, the country's foreign exchange reserves slipped to 12.625 billion dollars last week, down by 26 million dollars from the previous week, this was stated in the State Bank of Pakistan's weekly report.
Despite the drop, the banking sources said the reserves held by the central bank jumped to 11.014 billion dollars, as compared to the past week's 10.873 billion dollars, those with commercial banks dropped following a withdrawal by private account holders.
In the world markets, the dollar moved both ways ahead of the US job data, which has been a key factor behind the US Federal Reserve's reluctance to raise interest rates.
At the weekend, the dollar rose sharply versus the euro and other currencies, dealers said.
Reuters added: According to some economists, the dollars rally might fizzle out at least temporarily as a fall in Treasury bond prices in the wake of the jobs report prompts investors to sell US fixed income assets, possibly triggering dollars sales. However, this period of dollar's weakness is not likely to last long as higher interest rates would tempt investors back into US assets.
"We expect the market will buy dollars initially after the strong than expected US job data report. If we move into a situation where you lose more money on your US fixed income assets when compared to European assets, the dollar could see some pressure in this transition time," they said, adding: "When spreads are firmly dollar favourable, the money will come back into the United States."
KERB MARKET RATES: On Monday, the rupee lost its value versus the dollar, shedding two paisa for buying at Rs 57.75 and seven paisa for selling at Rs 57.85. It maintained its overnight levels versus the euro for buying and selling at Rs 70.04 and Rs 70.34 amid low activity, dealers said.
On Tuesday, the persistent demand for dollars in the interbank market encouraged the dollar to look ahead in the open market, too, gaining five paisa for buying and selling at Rs 57.83 and Rs 57.90, dealers said, adding the dollar demand is so high in the interbank market because of month-end payments, if rising demand for dollars continues.
The rupee also shed 40 paisa in terms of the euro for buying and selling at Rs 70.45 and Rs 70.55 as the single European currency showed slight improvement in the world markets, they added.
On Wednesday, the rupee posted fresh gain of two paisa versus the dollar at Rs 57.82 and Rs 57.88, moneychangers said, adding in line with the interbank market trend, the rupee managed to gain slightly in terms of dollar. It, however, shed 20 paisa in relation to the euro for buying and selling at Rs 70.60 and Rs 70.70.
On Thursday, the rupee managed to gain two paisa in relation to the dollar for buying and selling at Rs 57.80 and Rs 57.85. It, however, lost 46 paisa in terms of the euro for buying and selling at Rs 71.06 and Rs 71.16.
On Friday, it did not show any change versus the dollar in its overnight levels. It gained 16 paisa in relation to the euro for buying and selling at Rs 70.90 and Rs 71.00.
On Saturday, the rupee gained three paisa in relation to the dollar for buying and selling at Rs 57.77 and Rs 57.82. Versus the euro, it maintained its surge and picked up 80 paisa for buying and selling at Rs 69.89 and Rs 71.19.
INTERBANK RATES: On March 29, the rupee shed two paisa in relation to the dollar for buying and selling at Rs 57.52 and Rs 57.53 amid increased corporate demands, dealers said.
On March 30, it showed no any major variation in relation to the greenback for buying and selling at Rs 57.50 and Rs 57.53.
On March 31, the rupee resisted further erosion in its value versus the dollar to gain four paisa for buying and selling at Rs 57.47 and Rs 57.49.
On April 1, upward trend was seen as the rupee showed further increase of six paisa versus the dollar for buying and selling at Rs 57.41 and Rs 57.43.
The easy supply of dollars boosted the rupee's value in the interbank market, dealers said. On April 2, the rupee managed to hold its overnight levels in terms of the dollar.
On April 3, the rupee showed two paisa appreciation versus the dollar for buying and selling at Rs 57.39 and Rs 57.41.
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