The rupee maintained a stable posture versus the dollar during the week under review, currency experts said. In the inter-bank market, range-bound trading was seen as the rupee moved in a band of 59.60 and 59.65 for buying and selling, respectively.
The rupee picked up 45 paisa versus the euro for buying and selling at Rs 72.65 and Rs 72.70, respectively, while the rupee maintained its level at 60.45 and 60.50 for buying and selling.
General trend in the currency market is firm as the rupee maintained steadier trend versus the dollar and euro, dealers said.
Money experts said that the dollars' rising supply boosted the rupee's value in the local market. They attributed the firmness of the rupee to slight improvement in the remittances sending by the overseas Pakistanis.
This was a significant improvement as in the fiscal year 2003-04, the overseas Pakistanis had repatriated 3.868 billion dollars.
Commenting on the government's measures to curb the upward trend in the prices of essential commodities, they said that the country is importing wheat and other commodity items and taking necessary steps to control prices. The higher prices had pushed the inflation rate up.
The government has set the inflation target at eight percent for the current fiscal 2005-06. If the economic policies, aimed at controlling inflation, proved successful, inflation in the first half of the current fiscal would not be less than eight percent in any case. Exporters' dollar selling was also a boosting factor for the rupee's firmness, other experts said.
There were higher expectations in the overseas market that China would re-value its currency to ease the pressure, they said. Commenting on the effect of the Chinese move on the local currency market, President of the Forex Association of Pakistan (FAP) Malik Bostan said that 'we were waiting for any impact of the move on the rupee but there was no major reaction'.
Market players were expecting China to re-value its currency more or less five to seven percent, because the present appreciation is below the market perception. It seems that it will take the same action in days to come.
The Canadian dollar and Australian dollar and Norwegian krone were higher after the Chinese move.
China's central bank adjusted the value of the yuan to 8.11 per dollar on Thursday but the world market players believed that the China's revaluation would go further than two or four percent.
They said that in terms of a revaluation, two percent is at the lower end of expectations, so it is possible that we may see a five or 10 percent rise next time.
The yuan's revaluation will not do much to reduce the US trade deficit, the head of China's central bank said.
In the world markets, the dollar mainly held its firmness versus the leading currencies on expectations that the Federal Reserves will raise the interest rates in the coming days, they said.
But market viewers were of the opinion that the strong economic data and tame inflation likely to encourage the Fed to keep interest rates relatively low.
OPEN MARKET RATES: On Monday, the euro recovered 40 paisa for buying at Rs 73.10 and also picking up 20 paisa on the selling counter at Rs 73.20, dealers said.
The single European currency has started showing its muscles on the back of the dollar's weakness, they said. Additionally, it improved on easing worries over the political risks in the European Union, (EU), currency experts said.
The rupee maintained a firm outlook versus the dollar for buying and selling at 60.45 and 60.50, respectively.
On Tuesday, the rupee did not budge any side versus the dollar for buying and selling at 60.45 and 60.50, respectively.
The rupee managed to recover modest ground versus the euro, gaining 30 paisa for buying and selling at 72.70 and Rs 72.90, dealers said.
On Wednesday, the euro tracked the world markets' trend as it managed to gain 35 paisa in relation to the rupee for buying and selling at Rs 73.05 and Rs 73.25, they said.
While, the rupee retained its overnight levels versus the rupee for buying and selling at 60.45 and 60.50, respectively. On Thursday, the rupee lost its value versus the euro, losing 45 paisa for buying and selling at Rs 73.50 and Rs 73.70, dealers said. The rupee-dollar parity rates remained unchanged at 60.45 and 60.50 for buying and selling, respectively.
On Friday, the rupee inched up with an improvement of 20 paisa versus the euro for buying at 73.30 and 10 paisa gain for selling at Rs 73.60 in cautious trading, after the two percent of revaluation of the Chinese currency (yuan), which was less from the market expectations, money experts said.
The rupee did not move any side versus the dollar for buying and selling at 60.45 and 60.50 in the process of trading, dealers said. On Saturday, the rupee recovered nearly 90 paisa in relation to the euro in the open market for buying and selling at Rs 72.65 and Rs 72.70, respectively.
The rupee managed to gain handsome ground versus the single European currency as it failed to retain its firmness in terms of the dollar in the world markets, dealers said.
The rupee maintained its steadier trend versus the dollar for buying and selling at 60.45 and 60.50, respectively.
INER-BANK RATES: On July 18, the official rupee-dollar parity fluctuated slightly on the buying and selling counters at 59.63 and 59.64, respectively.
On July 19, the rupee showed slight change versus the dollar in the inter-bank market for buying and selling at 59.62 and 59.65, respectively.
The rupee showed slight weakness versus the dollar in the early hours but smooth supply helped it to trim its losses.
On July 20, the rupee moved slightly versus the dollar for buying and selling at 59.64 and 59.66 in process of trading, dealers said. On July 21, marginal recovery was seen as the rupee gained two paisa versus the dollar for buying and selling at 59.62 and 59.64, respectively.
On July 22, the rupee gained by two paisa in relation to the dollar for buying and selling at 59.60 and 59.63 on easy supply of the greenback. On July 23, the rupee did not show big changes versus the dollar for buying and selling at 59.61 and 59.62, respectively.
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