The rupee managed to hold it's obtaining levels against dollar on the currency market during the week, ended on February 25. In the inter-bank dealings, the rupee managed to gain two paisa in relation to dollar for buying and selling at 90.84 and 90.86.
In the open market, the rupee rose by 10 paisa versus dollar for buying and selling at 90.80 and 91.00, the rupee, however, lost Rs 1.99 against euro for buying and selling at Rs 121.79 and Rs 122.29.
The rupee retained its present levels in relation to dollar despite the fact that country has started International Monetary Fund (IMF) payments. On Friday country paid first instalment of the loan of 399 million dollars to the IMF. The dollar may gain further in the coming days due to strong demand by importers. The main concern for the country is higher oil payments as a result of sharp increase in the oil rates. The oil prices going up in the overseas market, indicating payments for oil will be more costly in days to come. Level of oil prices went up this week unexpectedly, oil prices were higher in the international market, supported by buoyant economic data from the United States and Germany as well as concerns over Iran's nuclear programme, analysts said.
New York's main contract, West Texas Intermediate light sweet crude for April delivery, rose 72 cents to 108.55 dollars, while Brent North Sea crude for April gained 37 cents to 123.99 dollars in the afternoon. On Friday, Brent crude futures rose above 125 dollars a barrel.
The rupee touched a record low of 91.28 to dollar on January 9, pressured by worries about higher payments for oil imports and the country's overall economic health.
The State Bank of Pakistan (SBP) in its latest monetary policy, kept the key policy rate flat at 12 percent for the next two months. According to the SBP data, the current account recorded a provisional deficit of 2.633 billion dollars in the first seven months of the 2011/12 fiscal year, compared with a deficit of 96 million dollars in the same period last year. It is expected that the deficit to widen further in the coming months because of debt repayments and the lack of external aid. Other negative factor is huge loss of foreign exchange if the country not achieved target for textile sector.
INTER-BANK MARKET RATES: On Monday, the rupee drifted lower versus the US currency, shedding nine paisa for buying at 90.86 and 10 paisa for selling at 90.88 in process of strong demand for dollars by importers.
On Tuesday, the rupee shed four paisa in relation to the US currency for buying and selling at 90.90 and 90.92.
On Wednesday, the rupee appreciated by 10 paisa in relation to the US currency for buying at 90.80 and it also picked up seven paisa for selling at 90.85.
On Thursday, the rupee shed one paisa in relation to the US currency for buying at 90.81, however it inched up by two paisa for selling at 90.83.
On Friday, the rupee dropped by three paisa in relation to the dollar for buying and selling at 90.84 and 90.86.
OPEN MARKET RATES: On February 20, the rupee fell against dollar, sliding 10 paisa dollar for buying and selling at 90.90 and 91.10. In relation to euro, the rupee fell by 63 paisa for buying and selling at Rs 119.80 and Rs 120.30.
On February 21, the rupee dropped by five paisa versus dollar for buying and selling at 90.95 and 91.15. In relation to euro, the rupee extended its fall, sliding 20 paisa for buyingand selling at Rs 120.00 and Rs 121.00.
On February 22, the rupee gained five paisa against dollar for buying and selling at 90.90 and 91.10. In relation to euro, the rupee gave up weakness, rising by five paisa for buying at Rs 119.95 and it gained 55 paisa for selling at Rs 120.45.
On February 23, the rupee retained its overnight level in terms of dollar for buying and selling at 90.90 and 91.10. In relation to euro, the rupee extended fell, losing 65 paisa for buying at Rs 120.60 and lost Rs 1.15 for selling at Rs 121.60.
On February 24, the rupee, however, gained 10 paisa against the greenback for buying and selling at 90.80 and 91.00. In relation to euro, the rupee fell, giving up 30 paisa for buying and selling at Rs 120.90 and Rs 121.90.
On February 25, the rupee gave up rising trend against the greenback as it shed five paisa for buying and selling at 90.85 and 91.05. In relation to euro, the rupee continued slide, losing further 89 paisa for buying at Rs 121.79 and shedding 39 paisa for selling at Rs 122.29.
OVERSEAS OUTLOOK FOR DOLLARS: In the first Asian trade, euro and commodity currencies rose on chances Europe will sign off on a rescue deal for Greece and after China's central bank joined counterparts globally in acting to stimulate growth. The dollar rose to a six-month high against yen before erasing gains after it failed to clear a key technical resistance point, a break of which could signal the end of its four-year downtrend.
China cut the amount of cash banks must hold in their reserves on Saturday, boosting lending capacity in an effort to spur the world's second-biggest economy.
In the second Asian trade euro gained, popping above resistance at its 90-day moving average after euro zone finance ministers sealed a bailout package for Greece, though some analysts doubt the news will give the currency a big fillip.
The agreement on the 130 billion euro ($172 billion) bailout programme, while long expected, will help Greece meet repayment needs next month, sparking a knee-jerk, 100-pip rise in the euro against the dollar. The rupee closed at 49.3050/3150 to the dollar, after touching 49.05, its highest level since February 8, according to Thomson Reuters data. It closed at 49.27/28 on Friday ahead of a market holiday. The greenback was at 3.0150 in terms of the Malaysian ringgit and the US currency was trading at 6.2970 in terms of the Chinese yuan.
In the third Asian trade yen hit a six-month low against dollar, as Japanese importers and offshore players sold the currency, bringing it closer to testing a key technical level.
The yen extended its losses in the wake of the Bank of Japan's surprise monetary easing last week, with the dollar rising above 80.00 yen for the first time since August 2011, when the greenback rose to as high as 80.25 yen.
The yuan ended little changed against the dollar after the People's Bank of China set the mid-point in a narrow range, showing its intention to keep the yuan stable for a while.Spot yuan ended at 6.2960 versus the dollar versus Tuesday's close of 6.2964 after the central bank fixed the mid-point slightly weaker at 6.2988 against 6.2960 previously. The yuan has risen 8.42 percent since its June 2010 de-peg.
Inter bank buy/sell rates for taka against dollar on Wednesday: 81.69-81.75 (previous 81.70-82.00). Call Money Rates: 15.00-20.00 percent (previous 12.00-20.00 percent.
In the fourth Asian trade dollar dipped against yen, inching away from a seven-month high hit the previous day, after profit-taking and selling by Japanese exporters.The greenback took a breather from its recent rally against yen, having climbed 5.3 percent in February.
Inter bank buy/sell rates for the taka against the dollar on Thursday: 81.50-81.80 (previous 81.69-81.75) Call Money Rates: 12.00-20.00 percent (previous 09.50-20.00 percent). The yuan closed down slightly against dollar after the People's Bank of China let the mid-point return to the 6.30 level, guiding the yuan's movements within a tight range. Spot yuan closed at 6.2985 against dollar versus Wednesday's close of 6.2960 after the central bank fixed the mid-point slightly weaker at 6.3031 compared with 6.2988 previously. The yuan has risen 8.35 percent since its June 2010 de-peg.
In the final Asian trade the yen dropped to 7-1/2-month low against dollar, pressured by selling by Japanese importers, but market players said it was likely to find support as US Treasury yields are to set to remain capped.
The greenback has rallied five percent against yen in February, helped by easing steps from the Bank of Japan, Japan's shrinking current account surplus and a surge in its LNG imports as nearly all of the nation's reactors have gone offline following the Fukushima nuclear crisis.
The dollar was trading versus the Indian rupee at Rs 49.06, the greenback was available in relation to the Malaysian ringgit at 3.0080 and the US currency was at 6.2966 in terms of Chinese yuan.
At the weekend euro rose to its highest in more than two months against dollar in a rally that could be sustained in the near term, boosted by general optimism about the euro zone crisis and next week's round of cheap money from the European Central Bank.
The euro, rising for a third straight day, broke above the key 100-day moving average against dollar for a second consecutive session. It also breached key resistance around $1.3435, the 50 percent retracement of the decline from the late October peak to the mid-January trough.
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