Swelling trade deficit and higher debt payments pushed the rupee value down sharply versus dollar in the interbank market last week.
In the interbank market, the rupee lost 10 paisa for buying and selling at Rs 58.28 and Rs 58.30. The rupee, however, gained seven paisa versus the greenback for buying and selling at Rs 58.35 and Rs 58.45.
The euro lifted from its present levels versus rupee for buying and selling at Rs 72.00 and Rs 72.30.
According the banking sources, the main reason for the slide of the rupee was growing trade deficit of 3.20 billion dollars during 2003-04.
Currency analysts were of the view that the rupee might lose more ground in terms of dollar.
The payments of import bills are continuously depicting an unusual increase following higher oil prices due to uncertain conditions the world over, particularly in the Middle East, they said.
They said that higher import bills had wiped off the impact of 10 percent growth in exports during last fiscal year.
Market sources said that the rupee might slip more if banks again started dollars buying from open market to meet payment requirements. They said that the local currency accelerated its fall in the absence of intervention by State Bank of Pakistan (SBP) to check currency market direction to control the prevailing situation.
They said that the rupee might see further slide in the near future as there are still some payments in hand, and added that the dollar may be available at Rs 58.40 in the coming days.
Rising fears about terrorist attacks on United States and fresh rise in world oil prices pushed the dollar to four-month low versus euro.
According to currency experts, the greenback may not show significant improvement in its value versus major currencies ahead of US election.
On the back of dollar's slide, the euro might touch new high in the international markets as well in the local market, they added.
At a point, the euro rose to 1.2416 dollar. Euro is in a position to shine versus yen on lack of buying interest ahead of Japanese upper house elections, they observed.
On local grounds in US, the dollar is already under pressure due to budget and current account deficit, experts said. In addition, recent weaker-than-expected data in America forced it to face more difficult situation in days to come, they added.
IINTERBANK RATES: On Monday, the dollar crossed an important mark of Rs 58.20 in the interbank market as increased buying of greenback built further pressure over the rupee, experts said.
The rupee came under pressure on rising demand for dollar and was available at Rs 58.18 and Rs 58.20, they said, and added that in the absence of State Bank's intervention the local currency was likely to face more erosion against dollar.
On Tuesday, the dollar touched the new high at Rs 58.25 on upcoming debt and corporate payments, currency experts said.
Amid modest trading, the dollar picked up five paisa versus the rupee for buying and selling at Rs 58.24 and Rs 58.25, respectively.
Unless major payments were cleared, they said, the rupee might remain in a slump versus dollar (for the time being).
They said that continued dollar buying might push the rupee to lose further ground in the days to come.
On Wednesday, the rupee resisted decline in its overnight levels versus dollar for buying and selling at Rs 58.20 and Rs 58.22.
On Thursday, the rupee was mostly unchanged at Rs 58.21 and Rs 58.22 in process of trading, dealers said.
On Friday, the rupee lost its value versus dollar, losing six paisa for buying and selling at Rs 58.26 and Rs 58.28, experts said. On Saturday, more slide was seen as the rupee shed two paisa versus the dollar for buying and selling at Rs 58.28 and Rs 58.30.
OPEN MARKET: On July 5, excessive dollar buying in interbank market tumbled the rates in the open market as the rupee lost five paisa for buying at Rs 58.50 and three paisa for selling at Rs 58.58, dealers said.
On the back of dollar's fall, the euro went up sharply and crossed Rs 72 level, but at close it lost early gains to show 15 paisa slide versus rupee for buying and selling at Rs 71.55 and Rs 71.85.
On July 6, the rupee-dollar parity was almost unmoved for buying and selling at Rs 58.50 and Rs 58.55 despite heavy dollar buying by banks, dealers said.
Firmer trend in the overseas markets boosted euro in the local market, which gained 15 paisa at Rs 71.65 and Rs 71.95 for buying and selling, respectively.
On July 7, the rupee did not show any weakness and held its prevailing levels in relation to dollar for buying and selling at Rs 58.50 and Rs 58.55, respectively.
Getting a boost from the overseas market, the single European currency managed to keep its upper level versus rupee, inching up five paisa at Rs 71.70 and Rs 72.00.
On July 8, the local currency gained two paisa in terms of dollar for buying and selling at Rs 58.48 and Rs 58.53. The euro was available at Rs 71.80 and Rs 72.10.
On July 9, in the early session, the rupee came under heavy pressure due to interbank dollars buying and did not show any change in its overnight levels at Rs 58.48 and Rs 58.53, dealers said.
But in the afternoon session, the rupee reversed its weakness, recovering 18 paisa in terms of dollar at Rs 58.30 and Rs 58.40 following the banks' dollars selling to arrest the greenback artificial gain, dealers said.
The rupee also slid versus the euro, losing 15 paisa for buying and selling at Rs 71.95 and Rs 72.25 on expanding its grounds globally, dealers said.
On July 10, the rupee lost five paisa for buying and selling at Rs 58.35 and Rs 58.45. The euro was available at Rs 72.00 and Rs 72.30.
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