The rupee breached the barrier of 61 against the dollar in the open market during the week, ending on May 26, following the higher demand by the importers for clearance of bills as the fiscal year 2006 near to close on June 30, 2007.
In the interbank market, range-bound trading was seen as the rupee traded at 60.75 and 60.76 most of the time, but ended the week with two paisa gain for buying at 60.73 and picking up one paisa for selling at 60.75, dealers said.
The rupee, however, lost 10 paisa against the dollar for buying and selling at 60.90 and 61.00, they added. The rupee, however, gained 33 paisa against the euro as the dollar kept an upper hand over the other major currencies in the global markets, dealers said.
Commenting on the surge in the dollars' demand, some currency viewers said that the rupee came under pressure and might move slightly in the coming days.
The importers increased dollars' buying to meet the import payments, analysts said. Higher inflows helped the rupee to resist sharp losses against the dollar, but unexpectedly, if the dollars' demand increases by the importers, the rupee may tumble to face devaluation versus the US currency, they said.
Inflows of dollars in shape of remittances and foreign investment in the country will definitely support the rupee, they said. The foreign investment is at six billion dollar during the 10 months of current fiscal year (2006-07).
According to the weekly statement of the State Bank of Pakistan (SBP), the foreign exchange reserves stood at 13,792.6 million dollars on May 19, 2007.
INTER-BANK MARKET REATES: On Monday, the rupee held its weekend levels against dollar for buying and selling at Rs 60.75 and Rs 60.76, they said. On Tuesday, the rupee did not show any change against the dollar for buying and selling at 60.75 and 60.76, dealers said.
On Wednesday, the rupee inched up with one paisa gain against the dollar for buying and selling at 60.74 and 60.75, respectively. The next day, the rupee did not show any fluctuation against the dollar as supply was matching with the demand by the importers, dealers said. On Friday, the rupee inched up with one paisa gain against the dollar at 60.75 and 60.76 and at the weekend, the rupee also maintained its overnight levels at the same level, dealers said.
DOLLAR'S PERFORMANCE VERSUS MAJOR CURRENCIES: At the beginning session of the week, the euro rose to a record high against the yen as the yen stayed under broad pressure after a meeting of Group of Eight finance ministers at the weekend did not address currencies.
In the second session of week, the dollar held near a five-week high against the euro and a three-month peak versus the yen on cooling speculation that the Federal Reserve may cut interest rates later in the year.
Solid economic data last week has offered the US currency a respite from a wave of selling that had pushed it to a record low versus the euro last month, and the possibility that the Fed may not cut rates from 5.25 percent later this year has prompted investors to pare back short dollar positions.
OPEN MARKET RATES: On May 21, the rupee shed five paisa against the dollar for buying and selling at Rs 60.80 and Rs 60.90, dealers said.
Versus the euro, the rupee moved in the same direction, losing 10 paisa for buying and selling at Rs 81.90 and Rs 82.00 as the single European currency was firm in the international markets, they added.
On May 22, the rupee managed to hold its overnight levels against the dollar for buying at 60.80 while it picked up five paisa for selling at 60.85, they said.
The rupee also gained 26 paisa against the euro for buying and selling at Rs 81.64 and Rs 81.74, respectively.
On May 23, the rupee maintained its overnight level for buying at 60.80 while it shed five paisa for selling at 60.90, dealers said. It, however, could not perform so against the euro, falling four paisa for buying and selling at Rs 81.70 and Rs 81.90, they said.
On May 24, the rupee firmed against the dollar, showing no change in its overnight levels for buying and selling at 60.80 and 60.90, they said. While, the rupee managed to recover four paisa against the euro, picking up four paisa at Rs 81.66 and Rs 81.76, the said. On May 25, the rupee lost five paisa against the dollar for buying and selling at 60.85 and 60.95, they said. The rupee gained 16 paisa versus the euro for buying and selling at Rs 81.50 and Rs 81.60, they said.
On May 26, the rupee shed five paisa against the dollar for buying and selling at 60.95 and 61.00 during the day, they said. It lost seven paisa against the euro for buying and selling at Rs 81.57 and Rs 81.67, they said. During the third and forth sessions, the dollar moved both ways against the major currencies, they said. In last and final session the dollar slid versus the leading currencies following a report, depicting an unexpected fall in the home sale.
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