The rupee hit the lowest level at 63 against the dollar during the week in the interbank market during the hustle bustle of general election 2008. The rupee lost 19 paisa to the dollar in the interbank market for buying and selling at 63.11 and 63.13. In the open market, the rupee followed same sprint, losing 30 paisa for buying and selling at 63.30 and 63.40.
Against the euro, the rupee also fell by Rs 1.30 at Rs 92.80 and Rs 93.00. In fact, locally, the dollar got a boost from its firmness in the world market, as it has started improving from the present levels, the import bills turned costlier as a result of higher trend in the oil prices.
The higher trend in the dollar may help exporters in making room for their products in the international market due to the cheaper rupee as compared to the other competitors.
Sharp rise in oil prices increased the demand for dollars and it is expected the dollar may gain more ground as imports are on the upward march, resulting in, according to an official data, country's trade deficit to 2.05 billion dollars in January from 1.02 billion dollars in December and 1.15 dollars in January 2007. A plus point noted during the last four and five month that exports improved slightly but the discouraging thing is significant rise in the imports. Exports stood at 1.48 billion dollars in January this year, up from 1.17 billion dollars in January 2007.
It was noted that imports increased to 3.53 billion dollars compared with 2.33 billion dollars in the same period last year, partly because several shipments were shifted to January, analysts said, because of days lost to holidays in December and shut downs due to the assassination of opposition leader Benazir Bhutto on December 27.
The trade deficit for the first seven months of the fiscal year, July through January, totalled 10.33 billion dollars compared with 7.64 billion dollars in the same period last year.
According to the State Bank of Pakistan (SBP), country's foreign exchange reserves fell by 23 million dollars to 14.55 billion dollars in the week that ended on February 9.
The foreign reserves hit an all-time high of $16.39 billion in the week ended November 10, but fell because of outflows from the stock market after President Pervez Musharraf imposed emergency rule on November 3.
Emergency was lifted on December 15 but it appeared that many analysts observed that the foreign investors remained cautious about politics after the assassination of opposition leader Benazir Bhutto on December 27, 2007 and uncertainty ahead of a general election on February 18, 2008.
INTER-BANK RATES: On February 11, the rupee lost nine paisa against the dollar for buying and selling at 62.92 and 62.94 in process of trading. February 12, the rupee showed no major change in terms of the dollar at 62.91 and 92.94.
On February 13, the rupee shed three paisa for buying at 63.15 and 63.25. The rupee shed its value as the dollar was in demand in process of trading. On February 14, the rupee failed to give up its slide versus the greenback, shedding two paisa more for buying and selling at 62.96 and 62.98, they observed.
On February 15, the rupee lost 16 paisa in terms of the greenback for buying and selling at 63.12 and 63.14 as a result of the increased demand by the importers to clear payments, they said.
On February 16, the rupee resisted further decline as it inched up against the dollar in the interbank market amid pre-election session on Saturday, picking up one paisa for buying and selling at 63.11 and 63.13, money experts said.
WORLD MARKET SCENARIO: In Asia, amid first session of the week, the US dollar held mostly steady after a weekend meeting of industrialised nations passed with little comment on currencies, though the euro found some support as the ECB challenged talk of early rate cuts.
The Group of Seven (G7) finance ministers cautioned that the global credit crunch would drag on the world economy but left it to individual countries to take their own remedial action.
The single currency was aided by European Central Bank President Jean-Claude Trichet who warned the market not to bet on a cut in interest rates because of persistent inflation pressures in the euro zone.
Amid second session, the euro was lower against the major currencies. During the third session, in the Asian trade, the dollar slipped on Wednesday ahead of US retail sales figures that were expected to show more economic weakness, while repatriation flows linked to US Treasuries also put downward pressure on the US currency.
The yen inched up as Tokyo stocks trimmed early gains due to weaker Chinese equities, cooling demand for risky assets and prompting investors to unwind carry trades, in which they sell the low-yielding Japanese currency for assets in high yielders.
During fourth session, the dollar was little changed near a one-month high against the yen after surprisingly strong US retail sales data the previous day provided some relief to concerns that the US economy is falling into a recession.
In the final session during the week, the Asian trading, the dollar steadied after falling the previous day, when a pledge by Federal Reserve Chairman Ben Bernanke to act as needed to support economic growth and tackle downside risks fuelled expectations for another big cut in interest rates next month.
In the New York market, the US dollar slid against most major currencies on Friday, and posted its worst weekly performance against the euro in 2008 to date, after US economic reports rekindled fears that the economy continues to slouch toward recession.
OPEN MARKET RATES: On Monday, the rupee fell versus the dollar, losing 10 paisa for buying at 63.00 and it also shed 11 paisa for selling at 63.10.
The rupee followed the same trend in terms of the euro, dropping 20 paisa for buying and selling at Rs 91.50 and Rs 91.60 owing to the dollar is striving to come out of the prevailing weakness. On Tuesday, the rupee shed 10 paisa in relation to the dollar for buying and selling at 63.10 and 63.20 due to rise in the dollar demand. Versus the euro, the rupee gained 20 paisa for buying and selling at Rs 91.30 and Rs 91.40.
On Wednesday, the rupee extended its overnight weakness against the dollar, dropping five paisa for buying and selling at 63.15 and 63.25, they said.
The rupee lost 45 paisa versus the euro for buying and selling at Rs 91.75 and Rs 91.85, they said. On Thursday, the rupee also fell 15 paisa against the dollar for buying and selling at 63.30 and 63.40 in process of trading, they said.
The rupee tracked the same trend in terms of the euro, losing 10 paisa for buying at Rs 91.85 and dropping 20 paisa for selling at Rs 92.05, they noted.
On Friday, the rupee picked up five paisa against the dollar for buying and selling at 63.25 and 63.35, dealers said.
The rupee also dropped by 55 paisa in relation to the euro for buying and selling at Rs 92.30 and Rs 92.40, dealers said. On Saturday, the rupee failed to keep away from losses, surrendered its overnight gains after losing five paisa in relation to the dollar for buying and selling at 63.30 and 63.40, they said. Versus the euro, the rupee also fell, shedding 50 paisa for buying at Rs 92.80 and it lost 60 paisa for selling at Rs 93.00, they said.
Comments
Comments are closed.